As if offering unworkable levels on available tonnage wasn't enough, many buyers in Pakistan (as with Bangladesh) are also struggling with their LCs and banks. It seems as though lending has become much stricter with the returns simply not adding up after the continuous market falls of the last 5 months.
Indeed, many end users are struggling badly with purchases made at the peak of the markets last year (most vessels take months to cut) with some resorting to desperate and (in some cases) questionable measures to ensure they don't lose any more money.
The cheap Chinese steel has been at the root of all the problems in Pakistan with the currency and steel prices mostly steady there. The PSBA (Pakistan Ship Breakers Association) has again chosen to limit the output of steel from yards to the rerolling mills, in an effort to stabilize and control prices.
However, what really needs to be done is for prohibitive duties / taxes to be levied on the Chinese billets and limit its supply into the country. Pakistan needs to take the lead in this due to the notoriously bureaucratic nature of the Indian government in getting any new legislation passed.
Source: steel guru. 17 Feb 2015