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Ever Given owner aims to refloat ship by March 27 even as vessels skirt Suez Canal

Highlights

Ever Given owner: Aim to refloat the container ship by the night of March 27 local time

LNG tankers, container ships diverted; Saturday (March 27) high-tide awaited: brokers

Refined product cargoes from Persian Gulf to Europe seen delayed by up to a week

Tokyo — Japan's Shoei Kisen Kaisha, aims to refloat its stuck container ship, the Ever Given, by night of March 27, even as other cargo ships are increasingly diverted from their original trade routes as the Suez Canal remains blocked for a fourth consecutive day.

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The Ever Greet, a sister vessel of the Ever Given, was initially heading toward the Suez Canal from Asia but has turned south and appears to be sailing around the African continent, S&P Global Platts' trade-flow software, cFlow, showed.

Around seven LNG carriers have been diverted, out of which four were laden and three were ballast ships, according to shipping data provider Kpler.

The laden LNG carriers include the Al Mafyar and Al Samriya, which loaded at Ras Laffan with Qatari LNG and were headed to Suez but have turned around in the Red Sea. They also include the Maran Gas Andros chartered by Japanese trader Jera and the Pan Americas, which were carrying US LNG to Asia that are now going via the cape of Good Hope, ship tracking data showed.

The ships are avoiding growing congestion around the northern and southern end of the Suez Canal that had already grown to over 150 vessels overnight.

No improvement after efforts to move stuck Ever Given ship from Suez Canal: owner

Photo: Platts cFlow

"The common message we hear is that there is a high tide expected this coming Saturday March 27, and this is the best chance to free the vessel from her current grounding. Until this time it is premature to suggest further impact to the market, however, if this high tide comes and goes and the vessel is still aground, this may cause long-term impact," Toby Dunipace, Head of Gas at shipping brokerage SSY, said.

"The next cause of action would likely be to remove containers from the vessel, and as we understand it there is no plan in place for that yet. The situation is developing day by day and as such things can change very quickly," Dunipace added.

A Shoei Kisen Kaisha official had said earlier March 26 that efforts to move the vessel overnight didn't result in any improvement from works using dredgers and tugboats.

Ever Given is under a time charter agreement with Taiwan's Evergreen Marine which said in an update as of 07:00 am Egypt time on March 25 that two maritime professional rescue teams from the Netherlands' Smit Salvage and Japan's Nippon Salvage had been appointed.

Related factbox: Suez Canal blockage sends ripples through global commodity markets

Impact on LNG and Dry Bulk

SSY's Dunipace said for the LNG shipping market the impact currently is minimal, with only minor delays for shipping.

"We are not expecting a shortage of available LNG vessels across any basin or any significant delays due to the diversion, and therefore at present we are not expecting a significant uptick in charter rates," he said.

"The most popular trading routes in the LNG market, that goes via Suez, is from Arabian Gulf to NWE. An approx. 2-days delay could be eliminated by a simple speed adjustment. So at this point in time, the LNG market remains relatively calm," Dunipace said.

Derek Langston, Head of Research at SSY, said an array of dry bulk cargoes use the Suez Canal to access key markets in Asia, including grain from the Black Sea and Europe, coal and iron ore from the Black Sea, plus fertilizers from the Baltic Sea, and even coal and petroleum coke shipments from the US into India.

"Indeed, shipping schedules in the Black Sea are already being affected by the incident through delays to vessels arriving at port to load cargo, with the potential for further vessel shortages growing," Langston said.

Clean and Dirty Tankers

Refined product shipments from the Persian Gulf and India to Europe are expected to be delayed by up to a week as clean tankers, both Long Range and Medium Range, are unable to cross the canal, shipping sources in Singapore and North Asia said. This target to refloat the mega ship has come just as market participants are exploring safer near-term spot purchase of naphtha from the Persian Gulf and the US for their petrochemical plants in North Asia in the event of an indefinite delay in supply from Europe.

The shipping sources said there were also delays in the movement of several empty VLCCs which pick up crude from the North Sea. "One thing is a given, that North Sea arbitrage crude movement into Asia will be delayed," a VLCC broker said.

"For VLCCs, it has yet to reach a point where replacement vessels for ships affected on a route through the canal are needed, but if the issue is not resolved over the weekend then it will become problematic," Claire Grierson, Senior Director of Tanker Research at SSY, said.

She said Suezmaxes were more impacted as rates were starting to rise and where a lengthy blockage will more quickly affect vessel supply balances.

"Some vessels in this segment ballast northward through the Suez Canal, after completing voyages in the East, to lift cargoes from the Black Sea or the Mediterranean to go to Asia again, so a sustained canal disruption would have a significant impact on this voyage chain," Grierson said.

She said Middle East Gulf clean tanker rates, specifically LR2s and LR1s, had already started to trend higher prior to the blockage and charterers were asking for voyage options with routing via the Cape of Good Hope and the Suez Canal.

"This Cape rerouting could add as much as 20 days to a voyage from the Middle East Gulf to Rotterdam that would normally go via Suez," Grierson said, adding that prolonged disruption will affect vessel supply replenishment and boost freight rates at a time when many tanker segments have been struggling.

Suez Canal: A critical chokepoint in global energy flows

Suez Canal transit data over 2020

**904 distinct container vessels across 4,738 individual journeys (laden and ballast) equating to a total of 58.49 million TEU, and on average, 13 journeys and 160,233.67 TEUs each day. The top route was Egypt to Saudi Arabia.

**2,994 distinct bulker vessels across 5,358 individual journeys (laden and ballast) equating to 271.29 million mt, and on average 15 journeys and 743,255.5 mt each day. The top route was Ukraine to China.

**2,090 distinct tankers across 4,299 individual journeys (laden and ballast) equating to 245.01 million mt, and on average 12 journeys and 671,368.4 mt each day. The top route was Russia to South Korea.

**461 distinct gas carriers across 1,385 individual journeys (laden and ballast) equating to 90.71 million cu m, and on average 4 journeys and 248,510.5 cu m each day. The top route Qatar to the UK.

Source: VesselsValue

First published at 03:50 UTC, updated at 07:53 UTC: Recasts throughout, adds broker comments and market impact