Germany rail strike would hit Europe chems

07 November 2007 17:57  [Source: ICIS news]

TORONTO (ICIS news)--A strike by German train drivers due to start on Thursday was likely to cause disruption in key European chemical and feedstock markets, industry sources said on Wednesday.

 

Rail union Gewerkschaft Deutscher Lokfuhrer (GDL) said it would start the 42-hour freight rail service strike at noon local time and end it on Saturday morning.

 

"It’s too soon to tell, but it could cause quite a lot of disruption,” said a German liquefied petroleum gas (LPG) trader.

 

A German chlor-vinyl producer said: “All we knew was that the union had made a decision to strike, but the date was unknown to us. So far, it seems it will affect all chemical loads, but hasn’t spread to passenger carriers yet."

 

The movement of propylene was also expected to be affected, although some consumers can use barges or trucks.

 

Rail tank cars are used to import propylene from central Europe into Germany, and also to move material within Germany.

 

A recent lack of rail tank cars was one reason given for the inflated inland price compared with numbers at the coast. Logistic issues have been a talking point for much of 2007.

 

A monoethylene glycol (MEG) seller, however, said there would be a limited impact.

 

“We transport 99% of our glycols in trucks, not rail tank cars so we are not worried," he said.

 

“Sometimes we use a combination of trucks and rail tank cars to destinations in the south of Europe but the impact on this should only be limited.”

 

“For MEG, trucks are the preferred method of transport,” he added.

 

The decision to strike followed a favourable ruling by a labour court and the unwillingness of rail carrier Deutsche Bahn to grant better terms, GDL said in a statement.

 

But Deutsche Bahn said in a separate statement on Wednesday it was prepared to continue negotiating with GDL, which has rejected the company's offer of a 4.5% wage hike and a one-off  €600 payment for 2007.

 

Officials could not immediately be reached for additional comment on Wednesday.

 

Ed Cox, Adal Rafiq and Peter Salisbury contributed to this article

 

By: Stefan Baumgarten
+1 713 525 2653

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