MOSCOW (MRC) -- Shipping traffic through Egypt's Suez Canal resumed on Monday after a giant container ship which was blocking the busy waterway for almost a week was refloated, reported Reuters with reference to the canal authority's statement.
The 400-meter (430-yard) 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.
"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.
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.
Evergreen Line, which is leasing the Ever Given, confirmed the ship had been successfully refloated and said it would be repositioned in a lake that sits between two sections of the canal and inspected for seaworthiness.
Bernhard Schulte Shipmanagement (BSM), the technical managers of the container ship, said there were no reports of pollution or cargo damage, and initial reports ruled out any mechanical or engine failure as a cause of the grounding.
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 Rabie said.
The authority said earlier it would be able to accelerate convoys through the canal once the Ever Given was freed. "We will not waste one second," Rabie told Egyptian state television.
He said it could take up 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.
Oil prices were more than 1% lower at USD63.85 a barrel after the ship was refloated. Shares of Taiwan-listed Evergreen Marine Corp - the vessel's lessor - closed 1.75% higher after the ship was partially refloated earlier on Monday.
About 15% of world shipping traffic transits the Suez Canal, which is an important source of foreign currency revenue for Egypt. The stoppage was costing the canal USD14-15 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.
As MRC wrote previously, crude oil prices rose about 6% last Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the previous week. Oil prices were also supported by US Energy Information Administration data that showed refinery runs recovering after a winter storm shut Texas refineries last month.
As MRC informed before, the largest US refinery, Motiva Enterprises’ 607,000 barrel-per-day Port Arthur, Texas, plant, returned to normal operations. The refinery was shut on Feb. 15 when freezing temperatures, rarely seen on the US Gulf Coast, knocked out steam supply. Motiva began restarting the refinery on Feb. 24.
Motiva Chemicals has also resumed operations at its mixed-feed cracker in Port Arthur, USA. The process of restart of this cracker with the capacity of 635,000 mt/year of ethylene and 340,000 mt/year of propylene began on 27 February, 2021, and finished late last week. The cracker wa shut along with the refinery at the same site on 14 February, 2021, because of the deep freeze.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.