Prospect of shipment delays

Following several drone attacks on vessels by Houthi rebels in Yemen, many shipping lines stopped calling Djibouti this week with disruptions expected to continue for the foreseeable future. The expectations are that an international task force led by the US Navy will restore safe passage in the Bab el-Mandeb strait, the 20 mile body of water which lies between Djibouti and Yemen. Our understanding is that the port of Djibouti remains open however there are delays in vessels arriving and leaving.

Shippers had already been very active selling balance stocks during 1st half of December, we believe that any unsold stocks are now contracted. Overseas buyers will have longs at very attractive differentials. Execution will depend on what the NY terminal market does in the coming weeks, if it stays above 200 c/lb it could result in unfulfilled contracts.

Birr 55.88 = USD 1

Have a happy festive season!