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Despite freeing of the Ever Given, Suez Canal blockage results in price surges and force majeures in Europe

Petrochemical industry | 01 Apr 2021 11:05 IST | Polymerupdate.com

Late last evening, a Polymerupdate editorial team member was in conversation with an industry source in Europe, who said, “ with the Suez Canal now re-opened, after a six day block by the giant vessel Ever Given, it is a welcome sight to see ships plying again along one of the world’s busiest shipping lanes between the Middle East, Asia and Europe. Although the backlog of over 350 vessels will take days to clear, transporters are breathing a sigh of relief. But the blockage has resulted in a number of problems which will lead to steep price surges and supply disruptions.”

He said, “ we are hearing of force majeure announcements on account of the route blockage. PlastiVerd PET Riciclado in a letter to customers said that the closure of the Suez coupled with other logistical problems has resulted in a situation where it is unable to source raw materials.”

The source said, “ at least 25% of European PET capacity is reported to have been already impacted and the Suez blockage has further exacerbated the problem. Shipments of feedstock PTA from South Korea, for example have been hit on account of the Canal blockage. Already European PTA supplies were tight due to trouble at the PKN Orlen facility in Poland and the INEOS plant in Belgium. Now delays of feedstock PTA import arrivals will further result in supply delays. Worries about delays stemming from the disruption at the Suez Canal have also resulted in shortage concerns in other products like Styrene Monomer, 40,000 mt of which is imported into Europe from India and Saudi Arabia. Ships originating from here also pass through the Suez Canal.”

He added, “ we have been informed that cargoes which were stuck due to the Ever Given block include MEG, BPA, PET and PTA. Short term price surges as a result and a disruption in supplies of other petrochemical products is also expected.”
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