CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
BHP (ASX: BHP) is diverting some of its shipments from Asia to Europe away from the Red Sea due to the increase in drone and missile attacks by the Houthis, a Yemen-based rebel group that says it’s acting in solidarity with Palestinians as Israel strikes Gaza.
The world’s largest miner said that while most of its shipments do not go through this route, and there have been no major business disruptions so far, it prefers to avoid it.
“The Red Sea is one of the key shipping routes in the world, however, the majority of BHP’s shipments do not go through this route,” it said in a statement published by Reuters.
The Wall Street Journal said earlier on Thursday that BHP’s shipments from Asia to Europe would now follow the path taken by Danish shipping company Maersk, which goes by the Cape of Good Hope at the southern tip of Africa.
BHP’s move follows similar decisions by other major companies including oil giants Shell, BP and Qatar Energy.
On Wednesday, the US Secretary of State announced the Houthis will now be considered as a specially designated global terrorist, effective February 16th, for threatening the security of the country.
Canada also published a joint statement signed by other 23 nations, including the US, Germany, Australia and the UK, saying the Houthi attacks on commercial and naval vessels since mid-November have become a threat to all countries that rely on international maritime shipping.
Estimates from the International Monetary Fund show that transit volume through the Suez Canal was down by around 28% during the 10-days that ended on January 2nd, compared with a year earlier.
Shipments going around the Cape of Good Hope, in contrast, surged by around 50% in that period.
