LONDON (ICIS)--The logistical situation is slowly improving in the European chemical markets following the re-opening of the German Rhine valley route last week, according industry players.
However, the logistical situation is not so clear-cut, because there are still some residual effects from the recent rail disruption.
Moreover, there have been severe weather conditions that have hit parts of Germany over the past week, which are another logistical consideration, added some players.
Sources from various chemical markets said that while the German Rhine valley route is operational since 2 October, they do not expect the logistical situation to return to normal overnight.
This is taking into account the fact that the affected part of the German Rhine valley route was closed from mid-August until early October, because of subsidence that occurred during construction work at the New Rastatt Tunnel.
There is some expectation among market players that it could take between two to three weeks for the backlogs to be worked through, as the availability of alternative transport modes such as trucks and isotanks also need to improve, so these vehicles can return to the required locations.
“The main corridor in the Rastatt rail route may have opened early October, but we still need another two-three weeks before things go back to normal,” said a polystyrene (PS) producer at a recent industry event.
Sources have said that trucks were still in short supply over the past week, following the recent rail disruption, which led to some additional strain on alternative modes of transport such as trucks.
However, one ethanolamines buyer suggested that the logistical situation was improving in terms of both rail and road transport.
“It is a slow-to-medium improvement,” it said.
Italy was one of the areas that has been affected by the recent closure of the German Rhine valley route, because it is a key route for deliveries of various chemicals moving from northern Europe to Italy.
One ethyl acetate (etac) producer said it did not expect to see a balanced market in Italy before the second half of October.
Logistical problems in the European acrylonitrile-butadiene-styrene (ABS) and PS markets are easing with the opening of the Rhine Valley rail route in Germany.
INEOS Styrolution declared force majeure on ABS and PS for Italian and Swiss customers in early September due to the rail route disruption.
“The FM [on ABS] is not yet officially lifted,” said a company source on 6th October.
“However, in reality we face much less problems already and customers receive the required quantities now – most of that even in time again. We hope to officially lift the FM in the coming days,” added the company source late last week.
However, there was no further update available from INEOS Styrolution's FM at the time of writing.
Even though the German Rhine valley route has come back into operation, some players said that there were still some logistical concerns in the market, because of the harsh weather conditions in parts of Germany over the past week.
One ethanolamines producer said it was aware of some disruption in Germany “due to storms and rain and some people were killed.”
In the olefins markets, a few trading and producer sources said that on top of working through the residual effects from the recent German Rhine valley rail disruption, there is the weather-related impact from the storms in Germany to deal with.
“Massive storms in Germany. [We] were just clearing the backlog [from the Rastatt issue] and a lot of rail has been disrupted [this week on the back of the weather],” said one olefins producer.Meanwhile, an olefins trader said: “The bigger impact may occur on the logistic side as due to the storm many RTCS [rail tank cars] cannot load/return to some refineries.”
Focus article by Heidi FinchAdditional reporting by Nick Cleeve, Vasiliki Parapouli, Ciaran Tyler and Nel Weddle
Pictured: Cargo ships move along the Rhine Valley (Source:Hans Blossey / imageBROKER/REX/Shutterstock)