Chemical supplies hit as rail strikes continue

15 November 2007 12:34  [Source: ICIS news]

(Adds detail, reaction in last three paragraphs)

 

By Mark Watts

 

LONDON (ICIS news)--Rail strikes in France and Germany continued to disrupt European chemical supplies on Thursday as producers feared the consequences of prolonged action.

 

Scheduled to last 62 hours, the strike in Germany that began on Wednesday after freight drivers walked out was dubbed the worst in the country’s history by operator Deutsche Bahn.

 

Due to the unavailability of product because of the strike, one methanol buyer said it reduced output to 80% at its facility in Germany, adding it took three trucks to deliver one rail car's worth of material.

 

The company had methanol in tank but did not want to use it up because of the uncertainty surrounding the walkout, he said.

 

The effect of the strike was worsening as the demand for trucks to distribute products increased, a German monoethylene glycol (MEG) distributor said.

 

Demand for truck space was up by 50,000 tonnes already, "an impossible amount to satisfy", she said, adding customers not near the river Rhine were particularly suffering and facing delivery delays - and not just for MEG.

 

A caustic soda producer agreed, saying it was trying to get product to its German customers by road but finding trucks was a problem.

 

One German olefins consumer said it had sufficient stocks to survive a few days, with the hope that the strike would end on Saturday.

 

However, the Rhine was seen as more usable after the low levels last week had since lifted, aiding customers who could source material via barge.

 

Some traders had contacted the German rail companies putting pressure on them to deliver chemicals registered as "dangerous goods" during the strike and they had had some success, one source said.

 

Meanwhile, striking transport workers in France shut down most of the country’s rail network for a second day.

 

“We are not really affected now because we tried to buy product before [the strike] on a contractual basis,” said a source from French chemicals company Arkema, adding the industrial action was expected to last a week at the most.  

 

However, should the strike last longer than a few days, “we could be in trouble”, she said.

 

Arkema planned to resort to using trucks as an alternative but there might not be much availability, the source added.

 

The company's French facilities were having difficulty receiving material from the Netherlands and Germany. A spokeswoman said there would be no deliveries to the company on Friday.

 

Dominique Rain, head of transport and energy for chemical association UIC, said he was concerned that a second week-long strike in a month would portray a poor image of the French chemical industry.

 

He said certain sectors were likely to be more affected than others, such as fertilizers which are only transported by rail, and ammonia, which cannot be stored in large quantities.

 

Ed Cox, Caroline Howard, Adal Rafiq, Carl Roache, Shelley Kerr, Sofia Lind, Heidi Finch and Philippa Jones contributed to this article

By: Mark Watts
+44 20 8652 3214

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