Early comments on China's non-ferrous metals copper, aluminum, zinc, lead, tin and nickel on March 29

Taiwan’s Evergreen Shipping’s super-large cargo ship "Long Ci", which was stuck in the Suez Canal in Egypt, was still immobile on the 26th. More than 160 ships in the canal were forced to wait in line, causing one of the most serious shipping congestions in years. The "crash" caused the suspension of two-way shipping on the Suez Canal, and daily shipping worth about US$9.6 billion was also blocked. Outside the Suez Canal, the "ship jam" incident also flapped the wings of butterflies, affecting the supply of oil, natural gas, and copper in the global market, and may even threaten the production of toilet paper. "It can be said that the blockage of the Suez Canal has disrupted the pace of global liner operations." According to the current progress of the Egyptian handling of the incident, if there is no more professional personnel and equipment involved, the blockage caused by the ship's grounding will last 10-14 Today, this will have a greater impact on global maritime trade.

From rising oil prices to toilet paper supply

As of the 26th local time, the rescue work of the "Changci" freighter is progressing arduously. According to a CNN report on the 26th, the freighter, which is almost the height of the Empire State Building in New York, used 9 tugboats, two dredgers, and 4 excavators for frantic rescue. Stuck in one of the world's busiest canals. According to the Suez Canal Authority, in order to dig out a giant cargo ship that has blocked the waterway since Tuesday local time, 20,000 cubic meters of sand need to be removed from the canal, which is equivalent to eight Olympic swimming pools. The Suez Canal Authority, which originally announced that the problem could be resolved within two days, also issued a statement on the 25th that the expectation of the re-launch of the giant ship has been postponed, and the Suez Canal will be temporarily suspended from that day until the canal is completely unblocked.

The New York Times described the freighter on the 26th as "a big whale stranded on a tidal flat", blocking a key channel of global trade. Egypt’s “Financial News” reported that about 30% of the world’s oil transported by sea is done through the Suez Canal. In other words, if the Suez Canal is suspended for one day, the transportation of millions of barrels of oil will be delayed, and the losses to businesses and customers can be imagined. Experts interviewed by the Russian Satellite News Agency said that the "clogging" may cause oil prices to increase by 10% or even higher.

There are already signs that blockages are disrupting the global flow of LNG. The US "Market Watch" stated that the price of liquefied natural gas has risen moderately because of congestion. 8% of the world's liquefied natural gas is transported through the Suez Canal. Qatar, the world's largest liquefied natural gas provider, basically has natural gas products transported to Europe through the canal. If the blockage lasts for two weeks, about 1 million tons of LNG may be delayed to Europe.

The US CNBC website stated that in the context of the new crown epidemic, the crisis is yet another blow to the global supply chain. Shipping delays can affect everything from clothes and shoes people order online to fitness equipment, electronics, food, and global energy supplies.

What's more serious is that because the transportation of pulp may be blocked, the risk of global toilet paper shortage will rise again. According to a report by Fox News on the 25th, Brazil's Suzano, the world's largest producer of toilet paper wood pulp, said that the current global container crisis may cause supply barriers, leading to a shortage of toilet paper. The company mainly uses bulk carriers to transport wood pulp, but with the surge in demand for container ships, the pressure on cargo shipments has increased, causing delivery delays. The company's chief executive Shirka said that if producers do not have sufficient stocks, the interruption of the pulp trade will eventually affect the supply of toilet paper.

Delay China's copper imports

The German "Economic Weekly" stated on the 25th that the "shipping" of the Suez Canal has added to the problem of the already bottlenecked transportation between China and Europe. Because the journey from the Suez Canal to the Port of Hamburg takes about 10 days. From early April to mid-April, this effect will be obvious. According to the Port of Hamburg Company, one out of every three containers in the Port of Hamburg comes from China. Currently, they are all trapped in the Suez Canal. The port of Hamburg will lose millions of euros every day.

The "crash boat" incident is also affecting the Chinese market. Mysteel, a commodity service agency, said that the lengthening of the Suez Canal blockage may worsen the copper supply problem in China. Even if the problem is resolved within a few days, the shipping operations of ships may also delay the shipment of copper from Western countries to China. One month later.

China's copper ore is mainly imported from African countries and generally does not need to pass through the Suez Canal. Since most of the routes through the Suez Canal are container ships, rather than bulk carriers that transport bulk commodities such as coal, iron, and grain, they will mainly affect industrial and consumer goods. In addition, China's pulp imports mainly come from South America, and some are imported from Finland, Poland and other European countries. Ships transporting pulp from Europe do need to pass through the Suez Canal, which will cause certain impact.

As one of the world's three largest container liner routes, the European routes passing through the Suez Canal have huge container sizes and cargo values. Some crude oil and liquefied natural gas that China needs are also transported on this route. Since this is a main shipping line, the "clogging" incident will almost affect the shipping and trade of all countries along the Eurasian continent. Wu Minghua added that the route from Asia to Europe and the Americas is called the "pendulum route" in the industry. Since Asia to Europe also needs to pass through the Suez Canal, the incident will even affect the Americas.

If the congestion problem cannot be resolved quickly, the agricultural products produced in Ukraine will have to be diverted to the Cape of Good Hope in Africa and shipped to China, which means that more time and money will be spent. However, a freight forwarder in Ningbo said that it would not necessarily cost more to detour the Cape of Good Hope, because the additional fuel costs are almost the same as the tolls charged by the Suez Canal, mainly because it will take about a week of extra time.

Russia promotes the Arctic waterway

The Wall Street Journal reported on the 26th that shipping experts warned that the Suez Canal channel may take days or even weeks to resume navigation. At present, exporters and customers on the two continents of Europe and Asia are preparing for cargo delays. In addition, Maersk and the German company Hapag-Lloyd are considering diverting freighters around Africa to avoid congestion in the Suez Canal. Singapore’s Minister of Transport Wang Yikang asked the port department to prepare for the disruption of shipping. According to a report from the British Financial Times on the 26th, some shipping companies have contacted the US Navy to inquire about the possibility of pirate threats faced by diversion vessels. Dryad Global, a maritime security company, said that due to the temporary blockade and increased blockage of the Suez Canal, static ships have significantly increased the risk of pirate boarding, and ships in the Red Sea and Gulf of Aden are expected to face greater danger.

The US CNBC website stated on the 26th that the blockage of the canal is not bad news for everyone. JPMorgan Chase believes that the longer closure of the Suez Canal will make container shipping the biggest beneficiaries, while oil tankers, dry bulk and air cargo may also face some higher rates, of which Asian shipping companies will benefit the most. A person familiar with the operation of the China-Europe train told the Global Times on the 26th that due to the blockage of the Suez Canal, the domestic demand for the China-Europe train has increased recently.

Russia also took the opportunity to promote the Arctic waterway. According to a report by Yahoo News on the 26th, Russia on the 25th promoted the Arctic Waterway as an "alternative plan" for the Suez Canal in Egypt. Regarding the Arctic waterway promoted by Russia, Wu Minghua said that due to climatic reasons, the operation time of the waterway is limited in one year, and July to September is the golden period of each year. In addition, the Arctic waterway also has requirements for the ship itself, it must have an icebreaking function, and the requirements for safety control of the ship are also higher.

Due to the impact of this incident, the International Maritime Organization may, while respecting Egypt’s sovereignty, urge it to upgrade its management and crisis response measures on the Suez Canal. Member States may also be willing to provide assistance in this regard. Smooth operation concerns the interests of all parties.