Low Rhine water levels has little impact on Europe 50ppm barge market

24 August 2012 16:30  [Source: ICIS news]

LONDON (ICIS)--Low water levels on the river Rhine are having little impact on Europe’s 50ppm gasoil barge market as crude oil-driven price hikes have damaged demand for products, sources said on Friday.

“Yes, the Rhine is still low, but it doesn’t matter as nobody is interested [in buying 50ppm],” a trader said. “People are reluctant to buy as prices are so high.”

“There was a wave of buying on 50ppm a few weeks ago when prices were better,” the source added. “German end-consumer stocks are now at 56%. They can hold out. They’re waiting for lower prices.”

A second trader said: “Nobody is buying 50ppm. The Rhine water is low, but there’s low demand.”

The first source added that a drop of around $100/tonne (€80/tonne) might be sufficient to rejuvenate demand, but added that the euro-dollar exchange rate also plays a part in determining buyers’ interest.

Low water levels on the Rhine have meant that vessels travelling from the Amsterdam-Rotterdam-Antwerp (ARA) region into Germany and Switzerland are forced to lighten their loads, while freight rates have been driven upwards.

ICIS reported on Tuesday that a 3,000 tonne barge was only able to carry around 39% to 44% of its capacity to the upper Rhine destinations.

Data from the German waterways authority shows that levels in the Kaub region of Western Germany are today are at 126cm, compared with around 148cm on 19 August.

($1 = €0.80)

By: Jo Pitches
+44 208 652 3214

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