Rhine levels lower than average, barges unable to fully load at certain parts

LONDON (ICIS)–Water levels on key northwest Europe chemicals waterway the River Rhine are currently suitable for barge navigation in most parts but remain lower than average, according to a spokesperson for the Rhine Shipping Authority.

BASF’s Ludwigshafen site by the Rhine. Source: BASF

However, between kilometres (km) 508 and 540 barges are not able to fully load, which increases costs for petrochemicals players as their products need to be shipped in smaller amounts in more barges, or use other transport methods.

“Presently, the Rhine water levels are about half metre below long-term mean water level,” said the Authority’s spokesperson Florian Krekel.

“At the moment, the minimum fairway depth is about 2.60m between Rhine-km 508 and km 540. So most of the barges cannot load fully if they have to pass this part of the river.”

The stretch is near important petrochemicals facilities in west Germany, like the flagship site operated by chemicals major BASF at Ludwigshafen. It is highlighted in a lighter colour on the map below.

MEMORIES OF 2018
With the Rhine water levels already lower than average and drier weather approaching, petrochemicals players in Europe are holding their breath for potential higher logistical costs once again.

BASF alone suffered €250m in additional costs in the second half of 2018 due to supply disruptions at its Ludwigshafen site as a result of Rhine woes.

The company is forecasting that water level impacts will be less pronounced this year, according to CFO Hans-Ulrich Engel at an analyst call on 3 May.

The company has adopted a number of measures to mitigate the impact of logistics difficulties, including increasing on-site storage capacity and increasing its number of barge reservations, as well as taking steps to reduce its dependence on the Rhine’s water as a cooling source for plants at Ludwigshafen.

A source in the European fuel ethanol market said earlier in May that it was keeping a close eye on the Rhine water levels, adding it was worried about the lower-than-average current levels.

The source added that sustained rain would be needed in coming weeks for the Rhine’s levels not to fall too far and again cause higher logistical costs.

DROUGHT LINGERS
The acute drought in the summer of 2018 is still in petrochemicals players’ minds, and also the Rhine itself.

According to Krekel, ground water levels on the river have not yet recovered from the severe drought.

Another dry summer would only compound the problem.

Anxiety among players who watch the Rhine water levels daily can also lead to confusing information, according to the authority’s spokesperson.

“In recent weeks, there must have been a press release [saying] that water levels could fall even lower this year if there were as little rainfall this spring and summer as there was last year. This should be correct, as the ground water levels have not yet recovered from the dry period in summer 2018,” said Krekel.

“[However] This press release was subsequently shortened to ‘Water levels will fall lower than last year’, which is an untenable statement close to fake news as nobody can predict precipitation for the coming months.”

Additional information by Tom Brown and Clare Pennington

Focus article by Jonathan Lopez