Low Rhine to hinder barge traffic, could affect production – BASF

Jonathan Lopez

11-Aug-2022

MADRID (ICIS)–Low water levels on the Rhine river in Germany are set to impede navigation for some barges in the coming days, while production could be affected at “individual” plants, German chemicals major BASF told ICIS on Thursday.

The Rhine Waterways and Shipping Authority (WSA Rhein) also confirmed to ICIS on Thursday that the current low water levels could lead to fewer barges navigating the key petrochemicals and oil products waterway.

Those barges able to navigate will need to do it at very low capacity, a situation that has been ongoing for some weeks already as Europe deals with the drought.

Barges loaded at partial capacities sharply increase logistics costs for petrochemicals companies, which are forced to contract more barges for the same amount of material.

EYE OF THE STORM
BASF’s flagship Ludwigshafen site is located by the Rhine, and transport along the river is key for the company’s operations.

A spokesperson for the company said water levels are expected to stay well below the 60cm considered safe for barges to navigate at the Kaub gauge measuring point in southwest Germany.

Kaub is the shallowest part of the Rhine.

“The mark of 60cm of the Rhine has been undercut at Kaub. Levels in the range of 35-55cm are forecast for the next two weeks. For the predicted levels, some types of ships can no longer be used and will stop sailing; all others will sail with reduced loads,” said the BASF spokesperson.

“Currently, production is not affected by low water. However, we cannot completely rule out reductions in production rates at individual plants over the next few weeks.”

It added that after the low levels on the Rhine in autumn 2018, which increased logistics costs for BASF sharply, the company has been “increasingly relying” on alternative modes of transport, especially rail.

BASF also uses water from the river to cool its plants, but the record high temperatures recorded in many parts of Europe in July also threatened cooling activities.

“Part of the package of measures [introduced after 2018’s drought] was also the expansion of our re-cooling capacities. In the event of a foreseeable phase of hot weather, appropriate adjustments will be made at the site,” the spokesperson said.

“For example, re-cooling plants will be switched on to compensate for the lower volumes of water that can be taken from the Rhine. With measures such as the expansion and optimisation of the central re-cooling plants and the optimisation of the cooling water flows, we can prevent production interruptions during hot weather phases.”

‘UNFAVOURABLE SITUATION’
A spokesperson for WSA Rhein said the current drought has come much earlier than usual, adding that the rain forecast is not favourable overall, with water levels predicted to fall even further in the coming days.

“The current water levels are at an exceptionally low level for this time of year. For the next three-four days, water levels are predicted to fall another 10-15cm. The 14-day forecasts continue to point to a slight increase in water levels from the middle of next week,” said the spokesperson.

“However, this is not significant: the water levels remain at a low level. Usual periods of low water last until September/October. This does not yet mean that this will also be the case in 2022, but the current starting situation is comparatively unfavourable.”

The spokesperson added that barge loading capacities would depend on the size of the barge and that even in the 2018 drought, where even lower levels than the current ones were recorded, some barges could still navigate.

“During the exceptionally low water levels in 2018, the lowest water level in Kaub was at 25cm (which is equivalent to a water depth of 1.37m) and some barges were still navigating,” it concluded.

EUROPE PETROCHEMICALS ORDEAL
Other petrochemicals sources in Europe have also expressed dismay at the severity of the current crisis over Rhine navigation, with some predicting “disaster” in the coming weeks if water levels remain low or even fall further.

According to Elwis, a consultancy that specialises in German waterways, water levels could fall to just over 30cm at Kaub by 15 August, a depth set to impede many barges’ navigation.

Source: Elwis

A source at a large producer said at 30cm “almost nothing” could navigate along the Rhine.

Overall, sources are pessimistic about the gathering storm for petrochemicals in Europe: the crisis on the Rhine adds up to high energy and food prices, pushing inflation to multidecade highs, as well as potential natural gas supply curtailments from Russia in the coming months.

“We are already hugely uncompetitive price-wise [in Europe, compared with other regions] and demand is shockingly low; now, fulfilment will become an issue along the Rhine,” said a source.

“Everything is against European [petrochemicals] producers at the moment,” concluded another source.

Map by Miguel Rodriguez-Fernandez

Front page picture: The Rhine river in Dusseldorf on 10 August
Source: Ying Tang/NurPhoto/Shutterstock 

Focus article by Jonathan Lopez

Additional reporting by Marta Fern, Nazif Nazmul, and Nel Weddle

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