It would appear that the Ever Given has been, more or less, freed from her ‘stuck’ position in the Suez Canal.  Final efforts would be made at 09.30GMT today when it is expected that the ship would be completely free from her ‘lodged’ position in the side of the Suez Canal. 

Next steps would include, assuming that she is safely afloat, to examine the damage, if any, to the ship and if she was sea worthy enough to transit the Canal and continue on her journey.  If that is the case, and that is an optimistic take on what has happened to the ship thus far, the 500 odd ships waiting to clear the Canal would restart they journeys latest by tomorrow.

Few experts are expecting ships waiting at the Suez Canal to be diverted in droves unless the closure is confirmed to last for an extended period. That’s even though more than 150 vessels are waiting after the 20,388-teu Ever Given (built 2018) grounded in the key waterway on Tuesday, leading to a complete shutdown of traffic. The top executive of Boskalis, whose Smit Salvage is responding to the incident, said it could take weeks to refloat the vessel.

TradeWinds – 26 March 2021

The world’s number one line A.P. Moller Maersk said it was considering diverting vessels around Africa’s Cape of Good Hope, adding five to six days to the journey between Asia and Europe. It said time-sensitive cargo could be sent on trains and airplanes, although no decisions had yet been made.

Reuters – 25 March 2021

Data from Lloyd’s List Intelligence AIS tracking indicates that the first containership to do this [divert around the Cape of Good Hope] is Evergreen’s Ever Greet (IMO9832729), a sistership to Ever Given (IMO: 9811000) the vessel that ran aground in the canal on Tuesday.

Lloyd’s List – 25 March 2021

Initial reports have included engine failure and strong winds as the causes behind Ever Given (IMO: 9811000) becoming wedged across the canal but neither of these is entirely convincing. BSM, the ship’s manager, has denied there was any loss of power. The vessel, which was built in 2018 at Japan’s Imabari Shipbuilding, did have a previous incident in February 2019, when it experienced an engine blackout on the Elbe off Blankenese. The vessel lost manoeuvrability and veered off course, and despite tug assistance, came in contact with a vessel berthed at the ferry pier.

Lloyd’s List – 25 March 2021

Yesterday, the Ever Given, a large container ship, ran aground in the Suez Canal, lodging itself on the banks of the waterway and blocking traffic. Efforts were made to refloat the vessel, but, contrary to erroneous reports yesterday, they were unsuccessful, and the ship remains stuck at the time of writing. It’s extremely uncertain how long the blockage will last, but we aim to give an idea of which trades are affected and potential market impacts if the canal stays shut for a prolonged time. Within the dry bulk space, FFAs at first seemed to take a wait and see approach, with Tuesday’s severe sell-off pausing until more information about this incident came out. Since then, futures have rallied, indicating expectations that this disruption could benefit dry bulk freight. Since yesterday’s lows, both front-month Panamax and Capesize futures have gained as much as $3,300 in value. The canal is also critical for shippers in the Black Sea. For example, 97% of Ukraine’s Cape shipments of iron ore head East-of-Suez, and the canal effectively halves the distance to these markets. Backhaul shipments, such as coal volumes from Australia to Turkey heavily use this route too, again providing significant savings in sailing durations. For the geared ships meanwhile, Suez transits have accounted for 3.9% of this sectors total dry bulk trade so far in 2021. In these markets, the canal is a linchpin for fertiliser trades, which run both East to West and West to East, due to the wide range of goods that make up this cargo group. For example, Supramaxes and Handies haul fertilisers from countries in the Europe and Mediterranean area to Asia via the canal. Conversely we also see large volumes of fertilisers shipped from the Arab Gulf and Red Sea to West-of-Suez destinations such as the US. At the same time, the canal allows for large volumes of steel cargoes to flow from the Far East into Mediterranean countries such as Turkey and Italy. In the other direction, the canal is used for Russian and Ukrainian steel exports to China. More significant impacts could be on the cards for the Panamaxes and Supras, with these markets already tight. Although we forecast Black Sea grain shipments over April to be lower YoY, we still expect around 7.4m tonnes to be shipped before the seasonal lull in activity begins in May. With Chinese demand for grains still extremely high, prolonged Suez closures could translate to more of these ships taking the long route to the Far East, providing a boost to employment at a time of scarce vessel supply. Similarly, steel exports this quarter are on track to reach their highest level in five years. Import demand for these products in some regions is extremely high due to the mismatch between rapidly recovering steel demand and lagging production capacity. Countries such as China and South Korea, which did not see heavy capacity closures during the pandemic, have capitalised on this and have enjoyed a surge in steel sales over the past few months. A combination of these bumper trade flows and increased diversions due to prolonged Suez Canal issues could also lengthen voyages and tighten the market for geared ships further. We don’t know exactly how long the Ever Given will remain grounded in the canal, but we will continue to closely monitor this evolving story. Very recent reports are suggesting that refloating could take weeks, which would certainly have a direct impact on freight rates. Once we have a clearer picture of how long refloating will take, we will be further quantifying the lasting effect of the incident.

Braemar ACM – 26 March 2021