River Rhine closure leads BASF, Rhodia to reorganise shipments

19 January 2011 17:17  [Source: ICIS news]

LONDON (ICIS)--The closure of a 70km stretch of the river Rhine in Germany, after a ship capsized on the waterway last week, has started to create logistics problems for petrochemical producers BASF and Rhodia, company sources said on Wednesday.

Petrochemical major BASF said it has experienced issues getting some material in and out of its production hub at Ludwigshafen, Germany, and that in some instances the company has looked for alternative sources of transportation.

Company spokesperson Friederike Segeberg said that BASF had seen supply constraints on some materials, although she did not disclose details on which feedstocks BASF were short of.

“The majority of the raw materials we need in order to produce chemicals are well stocked. We can also transfer material we need from the river Rhine to the railway,” Segeberg said.

She added that BASF had sufficient naphtha.

“For some customers, we are also transporting material from the Rhine to rail, and if it is an emergency we are also transferring product by road,” Segeberg said.

“For certain product lines, we have had difficulties in supplying our customers on time, but we have spoken with them about that and are looking for solutions,” she added.

Rhodia has also begun to reorganise its production due to the river's closure. It has already postponed by one week the delivery of butadiene to its facility in Chalampe, France, which is near the Rhine, a company source said.

“We are working on various scenarios. The objective is to not cancel any volume,” the source added.

The source said that the company had asked suppliers to delay deliveries until February, in addition to normal volumes.

Despite chemical companies looking for alternative transportation options, German national railway operator Deutsche Bahn said that it had not witnessed any increase in business from petrochemical suppliers.

A spokesperson for Deutsche Bahn said that it had seen no increase in orders caused by the closure, adding that disruption to river traffic would be resolved within a few days.

The river is closed between Bingen, near Mainz, and Engers, just north of Koblenz, after a ship that was carrying 2,378 tonnes of sulphuric acid capsized on 13 January while en route from BASF’s Ludwigshafen site to Antwerp, Belgium. Two crew members were still missing.

On 18 January, Florian Krekel, a spokesman for shipping authority Wasser- und Schifffahrtsamt Bingen, said that tests are expected to be carried out on 20 January with the passage of a single ship, followed by a survey, which could result in the stretch of river remaining completely closed.

The river would then remain closed until the salvage operation – expected to last between two and three weeks – was completed, he added.

The Rhine is an important European shipping route for chemicals and other commodities, including minerals, coal and oil products.

Players in the European benzene market said there has been a race for January material this week in light of the transport problems along the Rhine.

The benzene market has seen a flurry of trading as players look to cover potential shortness until work was completed to salvage the sunken ship. The availability issues and firming global prices have helped push European benzene values up by $50/tonne (€37.50/tonne) so far this week, and the market is expected to strengthen further.

Additional reporting by Truong Mellor and Nel Weddle

($1 = €0.75)

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By: Franco Capaldo
+44 (0)20 8652 3214

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