The Business Times

Traffic in Suez Canal resumes after stranded ship refloated

Published Tue, Mar 30, 2021 · 05:50 AM

Ismailia, Egypt

SHIPPING traffic through Egypt's Suez Canal resumed on Monday after a giant container ship which had been blocking the busy waterway for almost a week was refloated, the canal authority said.

The 400-metre long Ever Given became jammed diagonally across a southern section of the canal in high winds early last Tuesday, halting traffic on the shortest shipping route between Europe and Asia.

Live footage on a local television station showed the ship surrounded by tug boats moving slowly in the centre of the canal. The station, ExtraNews, said the ship was moving at a speed of 1.5 knots.

"Admiral Osama Rabie, the chairman of the Suez Canal Authority (SCA), announces the resumption of maritime traffic in the Suez Canal after the Authority successfully rescues and floats the giant Panamanian container ship Ever Given," a statement from the SCA said.

The manager of the Ever Given container ship confirmed that it had been refloated in the Suez Canal at 1500 local time on Monday, and was heading to the Great Bitter Lake where it would undergo a full inspection.

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"There have been no reports of pollution or cargo damage and initial investigations rule out any mechanical or engine failure as a cause of the grounding," said Bernhard Schulte Shipmanagement (BSM) in a statement.

After dredging and excavation work over the weekend, rescue workers from the SCA and a team from Dutch firm Smit Salvage had succeeded in partially refloating the ship earlier on Monday using tug boats, two marine and shipping sources said.

Evergreen Line, which is leasing the Ever Given, confirmed the ship had been successfully refloated and said it would be repositioned and inspected for seaworthiness.

At least 369 vessels are waiting to transit the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels, the SCA's Mr Rabie said.

The authority said earlier that it would be able to accelerate convoys through the canal once the Ever Given was freed. "We will not waste one second," Mr Rabie told Egyptian state television.

He said that it could take from two-and-a-half to three days to clear the backlog, and a canal source said more than 100 ships would be able to enter the channel daily. Shipping group Maersk said the knock-on disruptions to global shipping could take weeks or months to unravel.

Egyptian President Abdel Fattah al-Sisi, who had not publicly commented on the blockage, said Egypt had ended the crisis and assured resumption of trade through the canal.

Oil fell on Monday as the container ship was refloated. Brent oil fell 63 cents, or one per cent, to US$63.94 a barrel by 1337 GMT. US crude was down 63 cents, or one per cent, at US$60.34 a barrel.

"Now that the Suez mini crisis is being resolved the oil market is left to its own fundamental devices again," said PVM Oil Associates analyst Tamas Varga. "Attention will shift back to the stuttering inoculation programmes (against Covid-19), the seemingly unstoppable rise in infection rates in several parts of the world, and the upcoming Opec meeting on April 1."

Prices have swung wildly in the last few days as traders and investors tried to weigh the impact of the blocked key trade transit point and the broader effect of lockdowns to stop coronavirus infections

Shares of Taiwan-listed Evergreen Marine Corp - the vessel's lessor - rose 1.75 per cent.

About 15 per cent of world shipping traffic transits the Suez Canal, which is an important source of foreign currency revenue for Egypt. The stoppage is costing the canal US$14-15 million a day.

Shipping rates for oil product tankers nearly doubled after the ship became stranded, and the blockage has disrupted global supply chains, threatening costly delays for companies already dealing with Covid-19 restrictions.

Maersk was among shippers rerouting cargoes around the Cape of Good Hope, adding up to two weeks to journeys and extra fuel costs. REUTERS

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