A vessel carrying steel coils from Korean steelmaker Posco — with the business executed via trading company Samsung — to a number of Turkish buyers has been hijacked by pirates off the coast of Somalia.
The mill is in negotiations with the pirates with a view to freeing the vessel — the Maltese-flagged 41,607dwt Ruen — which was on its way to Gemlik port in Turkey, as of 13 December. There is about 40,000t of coil on board for a handful of buyers, including a pipemaker and automaker, according to market sources.
The vessel entered the risk area of the Gulf of Aden/Southern Red Sea on 15 December, and has been off the central Somalian coast since 18 December, according to vessel tracking software.
“We are working in close co-operation with the relevant authorities on this matter and are unable to comment further at this time,” a spokesperson for the West of England Insurance Services, which insures the vessel, said.
Mill sources in Turkey said the seizure could interrupt shipments from Asia into the region, supporting coil prices. Traders and Turkish buyers suggested shipowners and charterers may try to avoid the Red Sea/Suez Canal route, opting for the much longer and costlier alternative of travelling around the Cape of Good Hope and up the eastern coast of Africa. This would also impact costs for sailing into the Mediterranean region. Some estimated it could add 35 days of transit time.
Shipping through the Red Sea/Suez Canal route has already been complicated by recent attacks on container vessels, with a number of carriers saying of late they would also sail around the Cape of Good Hope, increasing costs and adding transit time. Some mills will stop selling on a cfr basis, leaving the risk with buyers, one trader said.
A Turkish buyer of Asian slab said it could increase costs by about $25-30/t. There is also a risk that EU buyers with material on the water intending to clear into the 1 January quota may see their shipments delayed.
By Colin Richardson and Lora Stoyanova