24 January 2015

Pakistan’s breakers welcome steel duty

Pakistan's shipbreakers have welcomed a new 15% tax on imported steel products, while cautioning it may fail to stem cheap imports from China.

A 15% tax on imports of billets, bars, and wire rods has been introduced in Pakistan to counter perceived dumping.

"The regulatory import duty is definitely hailed by the Pakistan Ship Breakers Association, which expects it to reduce imports of Chinese finished steel alloy products," IHS Maritime was told by Asif Khan, secretary of the recyclers association at Gadani, one of the world's largest shipbreaking yards.

But he warned that Chinese steel producers are "bracing" themselves to cut prices to "nullify the impact".

"The situation will become clear in the weeks ahead," he said.

"But we understand that China has a large ready inventory for export at cheap prices, which is disturbing the market prices equilibrium."

South Asia's steel-producing ship-recycling industry has been hit since last year by cheap steel products from China.

Although India reduced its basic customs duty on imported scrap ships from 5% to 2.5%, the inflow of cheap products has continued to undercut the ship steel market.

However, despite the sector's claims of economic challenges, recyclers at Alang this year accepted a $180.28M loan, to upgrade 70 yards over the next four years, which is expected to take 40 years to repay.

Source: ihs maritime 360. 19 January 2015

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