The wood pulp industry warns of possible supply disruptions, and the risk of “toilet paper chaos” rises again.
Evergreen Marine super-large freighter Chang Chi is still stuck in the Suez Canal, causing hundreds of container ships waiting to pass, is trying to resolve the dilemma of the company described the freighter like “a giant whale stranded”, a group of elite team also came to the rescue on the 25th, hoping to dismantle this major challenge.
Liloyd’s List estimates that the “ship jamming” incident has led to a two-way shipping halt, with about $9.6 billion worth of daily shipping stuck along; this estimate shows that the Suez Canal westbound shipping lanes carry about $5.1 billion worth of cargo daily, while the eastbound lanes carry about $4.5 billion worth of cargo.
But Liloyd also admitted that this is only a “rough calculation”, the company estimates that there are currently 165 cargo ships waiting to travel through the Suez Canal, while the data compiled by Bloomberg information shows that there are about 185 ships.
Suez Canal is one of the world’s most important shipping routes
According to Aliianz Global Corporate & Specialty, the Suez Canal averages more than 50 ships per day, handling at least 10 percent of global trade; moreover, accidents on the Suez Canal are extremely rare, with only about 75 shipping incidents reported in the past decade.
The waterway is also a key route for global oil shipping, with an estimated 10% of seaborne oil trade passing through it. According to Arthur Richier, senior shipping analyst at Vortexa, preliminary information indicates that 10 tankers carrying 13 million barrels of Crude Oil may be affected by the incident, and nine other vessels loaded with clean petroleum products and raw diesel are also waiting to pass.
Braemar estimates, based on Suez Canal cargo flow data for the past year, that the Suez Canal “jam” may have disrupted crude oil and petroleum product shipments by about 2 million barrels per day.
Consultant Wood Mackenzie pointed out that if the Suez Canal continues to be stuck, it may lead to a reduction in the amount of oil brain and fuel oil that Asia can obtain from Europe/Mediterranean, which may support the price of Asian products.
Affected products are not only oil
According to Bloomberg information, currently stuck in the Suez Canal ships, including 40 bulk carriers, 35 container ships, 32 general cargo carriers, 17 tankers, 17 chemical / product carriers, 15 product carriers, 10 liquefied propane gas carriers (LPG Tanker), 8 live animal carriers, six crude oil / petroleum products carriers, four liquefied natural gas ( LNG) carriers, and one water carrier.
Research institute MySteel pointed out that the Suez Canal “ship jam” Time if lengthened, may lead to the Chinese mainland copper mining workers should worsen the problem, even if the problem is solved within a few days, ship passage operations may also lead to the shipment of copper ore from Western countries to mainland China delayed by a month. According to MySteel, mainland China imported 474,000 tons of copper concentrate from Mexico and 55,000 tons of anode copper pellets from Belgium last year, among others.
As the Suez Canal is also a major global LNG shipping route, analysts point out that if this incident is resolved within a day or two, it will have little impact on the LNG market. As the weather in the northern hemisphere warms up, the heating demand in Europe and Asia is sharply reduced, which will not cause the spot price of LNG to jump, but if it continues to be stretched, it may impact the LNG market as Qatari carriers will have to travel a longer voyage. Nearly 20% of LNG shipped from China to Europe passes through the Suez Canal.
Brazil’s Suzano, the world’s largest wood pulp maker, also warned of a global freighter jam that could disrupt supplies of wood pulp, a raw material used in the production of toilet paper, which Suzano ships mainly in bulk.
Suzano CEO Walter Schalka said that with the surge in demand for container ships, the tight situation has begun to spill over to affect bulk ships, and could lead to delays in Suzano’s shipments.
He fears that shipping problems could snowball and only get worse. If there is a serious disruption in the wood pulp trade and tissue manufacturers do not have sufficient stocks of wood pulp, it could eventually affect the supply of toilet paper.
However, Danske Bank pointed out that if the Suez Canal continues to be blocked, it may lead to higher sea freight rates, which will benefit shipping companies such as Maersk (Masersk). The incident has driven up tanker rates and has given tankers a brief respite.
The amount of follow-up claims may reach millions of dollars
Reuters quoted industry sources as pointing out that even if the ship problem is quickly resolved within a few days, the Suez Canal Authority (SCA) and other shipping operators whose voyages are blocked may also seek millions of dollars from the ship’s owners and insurance providers for revenue losses. Bloomberg reports that Evergreen Marine has pointed out that the shipowner is responsible for the losses caused by the incident.
The owner of the Evergreen Steamship Company, Reuters quoted sources as saying that container ships of this size usually have insurance against damage to towing and machinery, with coverage of $100 million to $140 million, and the ship is also insured in The Japanese market.
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