Europe chemical industry concerns grow over dwindling Rhine water levels
Tom Brown
23-Jun-2017
LONDON (ICIS)–Numerous European chemicals players have
expressed concern about key shipping artery the River Rhine,
with official data on Friday projecting that water levels are
likely to continue to fall in days to come.
Water levels are understood to be below the minimum levels
for full loading along sections of the river but at present
are not a serious issue, sources said.
However, players are concerned about the impact
of a prolonged warm, dry period could be on levels already
significantly below average for the time of year.
“[Levels are] not an issue right now but… [are] far below
where it is normally at this time of year,” said a buyer.
“With hot weather recently and to come, it will be
difficult,” it added.
“What is scary is [that] with the Rhine at the level it is
now, [we] could see a very dry July and August – we are glad
to have some RTCs [rail tank cars],” said a consumer that
takes some feedstock via barge.
“We are already not loading maximum [loads] on barges – we
are already allocating on barges,” it added.
Water levels along the busy section past
Kaub, Germany, stood at 152cm as of 12:30 London time on
Friday, below the 170cm floor for full loading of freight
vessels, and is expected to fall another 10cm over the next
four days, according to Germany’s waterway and shipping
administration.
Source: Wasserstraßen- und Schifffahrtsverwaltung
des Bundes
While this remains significantly above the levels of around
70cm recorded in January, when Rhine barges were
loading at 25-40% of total capacity, chemicals market sources
are concerned over how far that figure will drop in coming
months.
An analyst at Germany’s Federal Institute of Hydrology (BfG)
noted that some rain is expected in the region through the
rest of June, but that July is expected to be comparatively
dry, which could potentially exacerbate the lack of
substantial surface and groundwater replenishment in recent
years.
“Rhine levels start to worry us. There is no problem up to
now but they keep dropping while no rainfall is expected in
the coming days,” said a distributor.
“From my personal point of view, we will be confronted
with another low-flow extreme [water level condition] this
summer,” added a hydrological analyst.
The German gasoil and diesel market is also monitoring
Rhine levels despite a recent replenishment of stocks
following a sharp sell-off in upstream ICE Brent crude oil
and gasoil futures contracts, leaving inventories full enough
to meet end-user requirements.
The same is true for Switzerland where the land-locked
country has built up enough mid-distillates stocks.
However, traders in both countries are
keeping an eye on the Rhine because freight rates are rising
rapidly as the lower water levels prevent barges carrying
refined oil products from sailing fully loaded.
In an otherwise quiet jet kerosene market, the
Rhine has become a focus of uncertainty.
A risk management and supply officer for
jet fuel at a major airline said: “[There is concern] as we
have had issues the last couple of years.”
Source: BfG
Additional reporting by Cuckoo James, Vasiliki Parapouli,
Nel Weddle and Nigel Davis
(update adds additional market comment in
paragraph 10)
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