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CAIRO — The owners of a giant container vessel blocking the Suez Canal said on Thursday they were facing "extreme difficulty" refloating it, prompting Egypt to suspend navigation through one of the world's busiest shipping lanes. Shipping analysts warned the suspension could last days or even weeks, forcing businesses to consider diverting their cargos to the much longer route round the tip of Africa in a blow to global supply networks.

The Suez Canal Authority (SCA) said it was doing all it could to refloat the Panama-flagged MV Ever Given, a 400-metre-long vessel which veered off course and ran aground in a sandstorm on Tuesday.

Satellite pictures released by Planet Labs Inc show the 59-metre wide container ship wedged diagonally across the entire canal.

Japanese ship-leasing firm Shoei Kisen Kaisha said it owned the giant vessel and was facing "extreme difficulty" trying to refloat it.

"In co-operation with local authorities and Bernhard Schulte Shipmanagement, a vessel management company, we are trying to refloat (the ship), but we are facing extreme difficulty," Shoei Kisen Kaisha said in a statement on its website.

"We sincerely apologise for causing a great deal of worry to ships in the Suez Canal and those planning to go through the canal."

As shipping specialists warned it could take weeks to budge the vessel, the Suez Canal Authority announced it was "temporarily suspending navigation".

Maritime sources said on Thursday that a new dredger had been deployed to speed up the operation while northern convoy ships remain docked in the waiting areas of the canal.

"We've never seen anything like it before," said Ranjith Raja, Middle East oil and shipping researcher at international financial data firm Refinitiv.

"It is likely that the congestion... will take several days or weeks to sort out as it will have a knock-on effect on other convoys."

'Beached whale' 

A team from Dutch firm Smit Salvage is due to arrive in the canal zone on Thursday, said Peter Berdowski, CEO of its parent company Boskalis.

When asked about the challenges of moving the vessel, Berdowski told the Dutch TV news programme Nieuwsuur: "It's really a heavy whale on the beach, so to speak."

The blockage has already hit world oil markets. Crude futures surged six per cent on Wednesday as traders assessed the likely impact on deliveries.

Broker Braemar warned that if tug boats are unable to move the giant vessel, some of its cargo might have to be removed by crane barge to refloat it. 

"This can take days, maybe weeks," it said.

Canal traffic has been disrupted several times in the past, notably during the Arab-Israeli wars of the second half of the 20th century.

It was closed for six months after Egypt nationalised the canal operating company in 1956 prompting an abortive invasion by Britain, France and Israel.

During the Six-Day War of 1967, Egypt imposed a blockade to prevent the canal's use by Israel which lasted until 1975.

More recently, in 2018 the canal was temporarily closed after a Greek-owned bulk carrier suffered engine failure, triggering a five-ship collision.

'Critical' route 

The vessel's managers, Singapore-based Bernhard Schulte Shipmanagement (BSM), said its 25 crew were unhurt and the hull and cargo undamaged.

A MarineTraffic map showed large clusters of vessels circling as they waited in both the Mediterranean to the north and the Red Sea to the south.

Historic sections of the canal were reopened in a bid to ease the bottleneck, with dozens of ships waiting at both ends of the waterway.

The waterway drastically shortens travel between Asia and Europe because it prevents vessels from having to navigate around southern Africa's Cape of Good Hope. 

The Singapore-to-Rotterdam route, for example, is 6,000 kilometres (3,700 miles) and up to two weeks shorter via the canal than going around Africa. 

It is an "absolutely critical" route because "all traffic arriving from Asia goes through the Suez Canal," said Camille Egloff, a maritime transport specialist at Boston Consulting Group. 

Nearly 19,000 ships passed through the canal last year carrying more than one billion tonnes of cargo, according to the SCA. Egypt earned $5.61 billion in revenues.

SAN FRANCISCO — US chip titan Intel said on Tuesday it will invest $20 billion in building two new plants in Arizona as part of a plan to ramp up production in the United States and Europe.

The move comes as a global chip shortage has countries and companies in those regions looking to reduce reliance on plants in Asia for semiconductors, which are used in a growing array of products such as cars.

"Intel's investment will help to preserve US technology innovation and leadership, strengthen US economic and national security, and protect and grow thousands of high-tech, high-wage American jobs," Secretary of Commerce Gina Raimondo said in a statement.

Intel chief executive, Pat Gelsinger, announced the investment during a webcast about the company's strategy, as it faces pressure to come up with ways to fend off fierce competition.

"Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations," Gelsinger said.

He stressed that Intel intends to continue doing most of its chip making at its own plants while also building on relationships with third-party manufacturers for some of its product line.

As part of a vision to be a major producer of chips in the United States and Europe, Intel is establishing a new manufacturing unit called "Foundry Services," according to the Silicon Valley company.

"Gelsinger's disclosure gave me many reasons to believe Intel is 'back' if the company can execute its plans," said analyst Patrick Moorhead of Moor Insights and Strategy.

"The $20 billion doubling down of manufacturing is bold."

Moorhead expected more investment by Intel given the need expressed by the United States and European governments for on-shore, leading-edge chip making.

"This isn't Intel hedging its manufacturing bets — it looks to me as if the company is all-in", the analyst said of tech giant's plan.

Intel said it took in $20 billion in revenue during the final quarter of last year, little changed from a year earlier, amid robust sales of personal computers.

The company reported net income of $5.9 billion in the quarter, down a billion dollars from the same period a year earlier.

Intel early this year approved an increased cash dividend of $1.39 per share in what may have been a move to placate activist investor Dan Loeb of Third Point, who has called on Intel to bolster its weakening position in the chip market.

The hedge fund has told the company it should consider outsourcing its manufacturing operations to keep pace with rivals in the sector such as Taiwan-based TSMC and South Korean giant Samsung.

While Intel remains one of the world's leading chip companies, it has lagged behind rivals in the fast-growing segment of mobile devices, and its chips are being phased out by Apple, which is developing its own microprocessors for its Mac computers.

By Farid Farid
Agence France-Presse

CAIRO — Tug boats worked on Wednesday to free a giant container ship stuck in the Suez Canal after it veered off course in a sandstorm, creating huge tailbacks on one of the world's busiest trade routes.

Egypt's Suez Canal Authority (SCA) said it was doing all it could to refloat the Taiwan-run but Panama-flagged MV Ever Given, a 400 metre long and 59 metre wide vessel, which was lodged at an angle across the waterway.

Historic sections of the canal have been reopened in a bid to ease the bottleneck of backed up marine traffic, with dozens of ships waiting on both the Mediterranean and Red Sea sides.

The SCA said the ship was caught up in a gale-force sandstorm, a common occurence in Egypt's Sinai desert at this time of year, which blotted out light and limited the captain's ability to see.

It was "mainly due to the lack of visibility due to the weather conditions when winds reached 40 knots, which affected the control" of the ship, the SCA said in a statement.

Ship operator Evergreen Marine Corp. said that the Rotterdam-bound vessel "ran aground after a suspected gust of wind hit it".

Storms with dense dust clouds carrying fine sand have swept across much of the Middle East since Tuesday.

'Stuck sideways' 

Shipping monitors MarineTraffic recorded that the vessel had been in the same position since at least Tuesday afternoon.

SCA Chairman Admiral Osama Rabie said in a statement on Wednesday morning that "rescue and tug units are continuing their efforts" to free the MV Ever Given, involving at least eight tugs.

Bloomberg reported it had caused a build-up of more than 100 ships seeking to transit the canal. 

"There was a grounding incident," Alok Roy, fleet director of BSM Hong Kong, the Ever Given ship manager, told the news agency.

Photographs released by the SCA also showed excavators onshore digging soil from the canal's bank, with the earth-moving equipment dwarfed by the giant hull towering above.

The canal, which links the Mediterranean to the Red Sea, was opened to navigation in 1869, and was expanded in 2015 to accommodate larger ships.

MarineTraffic showed a map with large clusters of vessels circling at both ends of the canal — in the Mediterranean off Port Said, and stretching far southwards into the Red Sea.

Instagram user Julianne Cona posted a photo of the grounded ship from the Maersk Denver, which was forced to wait behind the Ever Given.

"Ship in front of us ran aground while going through the canal and is now stuck sideways," she wrote. "Looks like we might be here for a little bit."

The Suez Canal is one of the world's most important trade routes, providing passage for 10 per cent of all international maritime trade.

The journey between ports in the Gulf and London, for example, is roughly halved by going through the Suez — compared to the alternate route via the southern tip of Africa.

'Domino effect' 

Even a short closure of the route has a big impact on "just in time" logistic chains, said Camille Egloff, transport and logistic expert at Boston Consulting Group.

While Egloff said the ship was in a "hyper-controlled environment" and suggesting it would be "a matter of hours" before traffic was moving freely again, the costs would add up.

"It costs a lot of money, because it blocks the traffic behind," she said.

"There will be a domino effect in all the European ports in the coming days."

Nearly 19,000 ships passed through the canal last year carrying more than 1 billion tonnes of cargo, according to the SCA.

It has been a boon for Egypt's struggling economy in recent years, with the country earning $5.61 billion in revenues from the canal in 2020.

President Abdel Fattah Al Sisi unveiled plans in 2015 for an expansion designed to reduce waiting times and double the number of ships using the canal daily by 2023.

Container ships account for more than half of the canal's total traffic, with some of them being among the largest in the world.

Most of the cargo travelling from the Gulf to Western Europe is oil.

In the opposite direction, it is mostly manufactured goods and grain from Europe and North America headed to the Middle East and Asia.

By Roland Jackson

Agence France-Presse

LONDON — Oil prices surged on Wednesday following the blockage of the Suez Canal while stock markets traded mixed.

A grounded ship that has temporarily blocked the key transit route for oil, along with the latest supply data from the United States, helped the price of the main US oil contract spike by five per cent.

The US benchmark contract, West Texas Intermediate, then quickly eased back to a gain of 4.6 per cent, while the European benchmark, North Sea Brent oil, was 4.6 per cent higher.

Bitcoin rose to $56,530 after Tesla boss Elon Musk tweeted that the carmaker now accepts the virtual currency as payment in the United States.

Continued concerns that Europe's worsening coronavirus crisis could derail economic recovery were balanced by survey data showing the eurozone economy had returned to growth in March for the first time in six months.

In the background, investor fears are growing over another deadly wave of Covid-19 and concerns over a stimulus-fuelled global inflation spike have not abated.

Frankfurt stocks lost 0.5 per cent and the Paris stock index was flat in afternoon trading.

"Once again, concerns about another wave of Covid-19 cases in Europe and worries that economies will reopen later than initially predicted are weighing on stocks," said CMC Markets analyst David Madden.

Europe's two biggest economies, Germany and France, have been forced along with other countries to impose new restrictions to battle the disease, as they also struggle to get vaccination programmes rolling properly.

Outside the eurozone, London's FTSE 100 edged up 0.3 per cent on Britain's rapid vaccination drive and news of easing UK inflation.

In New York, the Dow Jones index climbed 0.9 per cent, while the Nasdaq Composite shed 0.4 per cent.

In Asia, Hong Kong was among the biggest losers, dropping by two per cent on news that the government had suspended its Pfizer/BioNTech vaccine programme over concerns about packaging, dealing a blow to the city's already slow inoculation programme.

Hong Kong's Hang Seng Index has now fallen into a correction having lost more that 10 per cent from its recent high.

Tokyo also shed two per cent, while Shanghai, Mumbai and Jakarta each lost more than one per cent.

RAS AL KHAIMAH — The 2021 Arab Aviation Summit concluded with stakeholders unanimous in their call for stronger collaboration to drive faster recovery of the aviation industry.

They emphasised the need for stronger collaboration to enhance confidence among the public and to work towards impactful strategies that will support the revival of the aviation sector.

Experts highlighted the role of the tourism sector as a catalyst for post-pandemic growth. They urged the need for unified travel guidelines to support the industry, and expressed optimism that with more vaccinations being administered, there will be greater confidence among the public to travel.

Adel Al-Ali, CEO of Air Arabia Group, expressed hope that the sector would start to recover during the second quarter of the year, especially in light of the vaccination campaigns, which restore confidence for travellers along with easing restrictions on travel between different countries.

He predicted a positive outcome in the months to come as he highlighted the need for industry and regulators to work together on contingency plans to address the current challenges and develop recovery plans for the entire aviation industry.

“It is very important that the concerned and responsible parties meet to find a common ground that will contribute to advancing the recovery of the aviation sector, so that we can discuss the conditions the aviation sector is going through in the current period and what is required to support recovery efforts and future growth and to overcome the pandemic,” he said.

"We all know that we will not return with the same strength, but we are seeking success and recovery, and we are trying to strengthen the necessary support to overcome the pandemic, and we expect movement and travel to return,” he noted. 

Egypt Air’s Chairman & CEO, Rushdi Zakaria’s said: “The summit fostered a platform for discussion on the current situation of the aviation sector and reiterated that health and safety remain the number one priority.”

Sunil John, president – Middle East of BCW and founder of ASDA’A BCW, said the aviation sector’s current challenges cannot be addressed by airlines, airports, or tour operators alone but “global organisations such as IATA that must bring a commonality of approach and an industry-wide response regarding the safety and vaccine protocols to benefit the sector”.

Peter Morris, chief economist at Flight Ascend Consultancy, said the success of the industry calls for commercial solutions. “Only business models that meet the needs of customers will be successful. You cannot force people to travel and there are different sets of parameters for business and leisure.”

The summit was the first in-person aviation event to be held since the pandemic, and was organised by following all safety protocols, sending a strong message of confidence for the industry and the travel community.

 More than 300 participants attended the panel discussions and live presentations on topics such as airline strategies to navigate through the new normal, sustainability outlook, according to the organisers.