29 March 2011 17:24 [Source: ICIS news]
LONDON (ICIS)--Low water levels on the Rhine river are continuing to cause difficulties for barges, sources in the European gasoil barge markets said on Tuesday.
The water level had dropped by approximately 1–1.29m in around three weeks, a trader in Germany said.
This made it difficult to supply destinations to the south, such as Switzerland.
“The water levels are on a pretty low level, but they are not causing that many problems if you are not forced to go down to Switzerland,” said a second German source.
Although locations further north, including Frankfurt, had been less affected, vessels were subject to weight restrictions.
A vessel heading to Karlsruhe in the southwest of Germany which would normally carry 3,000 tonnes of material could only carry a maximum of 1,200 tonnes, the trader said last week.
The second source added that, whereas a company might normally send a 1,200-tonne vessel to Frankfurt, it was now limited to 1,100 tonnes.
Low water levels also bring a Rhine low water surcharge into effect. The lower the water level at given destinations, the higher the surcharge.
“The problem is you have to pay higher freight rates,” said a trader in Belgium. “The problem is the draft of the vessel.”
The draft refers to how low in the water the vessel sits.
Sources were unsure of freight rate figures, but they had not increased to the extent that some participants had expected.
“The freights are not as high as they should be, given the low water levels," the second German source added.
It was unclear why freight rates were not higher.
“I do not know why they are that low,” the source added.
A weather forecast for the Upper Middle Rhine Valley suggested rain could be expected later this week, followed by more dry weather in early April.
On Tuesday afternoon, 0.1% sulphur gasoil barges were trading at $967–969/tonne FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp), down from Monday’s range of $975.50–977.50/tonne FOB ARA.
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