River Rhine expected to close south of Kaub – methanol sources

18 November 2011 12:52  [Source: ICIS news]

LONDON (ICIS)--The river Rhine is expected to close south of Kaub, Germany, soon because of critically low water levels, sources in the methanol market said on Friday.

Barges have been forced to carry reduced loads for more than two weeks due to a lack of rainfall. In the stretch of river south of Kaub, the water is reportedly only 62cm deep while the lowest level permitted to allow barge traffic to pass is 60cm, sources said.

Water levels are forecast to hit 56cm by Sunday and the river closed to traffic as a result, said a German producer. A Swiss trader agreed, saying “it is not whether the river will close, but when”.

Prior to this week, the logistical problems caused by the situation were resulting in a build up of methanol inventories in Rotterdam. This had begun to put downward pressure on prices as holders struggled to free up storage for incoming shipments.

However, on Monday, Methanex closed its 1.3m tonne/year plant in Damietta, Egypt, because of protests. This has acted as counterweight to the Rhine situation, and helped to push European spot prices up €17-19/tonne ($23-26/tonne) FOB (free on board) Rotterdam.

($1 = €0.74)

By: Ross Yeo
+44 208 652 3214

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