The cargo ship traffic jam on the Suez Canal in Egypt is exacerbating the shortage of primary aluminium billet supplies in Europe, resulting in higher premiums on Friday, March 26.
The canal, which is the key route for shipments between Europe and Asia, has been
blocked by the large containership Ever Given since late on Tuesday, resulting in a floating traffic jam of more than 100 vessels.
"I think the situation just sparked another level or worry; all we have been talking about across commodities and markets is the freight situation and how it has mucked things up," a broker said.
"We're seeing that, in aluminium, while there is metal around, it's in the wrong places. As soon as people heard about the Suez Canal situation the market turned bullish again because it's another logistical and freight problem," the broker added.
The jam has caused panic among aluminium billet market participants in the region, where high freight rates have disincentivized such products from coming to Europe.
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