LONDON (ICIS)--Low water levels on chemicals freight thoroughfare the River Rhine and other waterways are starting to cause significant logistical issues in the market, with little relief in sight as northwest Europe’s hot, dry summer continues.
Rhine water levels of below 100cm in some cases are limiting barge capacities, raising prices and delaying deliveries, with no rain expected in Germany this month.
“We are close to the threshold when we will have to consider using trucks instead,” said a market source.
Barge capacities are limited to 60-70% in some cases, with the issues becoming more acute the further south freighters travel, according to another source. The limits on capacity have caused shipping rates to double in some cases.
Elsewhere in Germany, waterways between Hamburg and Berlin have fallen as low as 30cm in some cases, according to Germany’s federal water authority, Bundesanstalt fur Gewasserkunde, raising questions over whether all routes can support large transportation vessels at that point.
An isopropanol (IPA) source said that it was experiencing logistical issues due to lower freight volumes, but expects to be able to meet contract obligations, but that if current conditions drag on too much longer it will become difficult to supply production facilities with feedstocks.
July is traditionally a quiet month for many markets, but further gridlocks could ensue if waterway access to Antwerp in Belgium, a key international chemicals shipping hub, become difficult or impossible, particularly in light of the difficulties in sourcing alternative freight routes, said another.
Where benzene and styrene are concerned, both products are well supplied so any brief delay or restriction to loading volumes will be marginal if the water levels are low for a short while. In the meantime, players might look to load in August instead, but there is no major impact yet.
Provided the levels recover in the next few weeks, there is not expected to be much too much concern, but participants are keeping a watch on the levels in case the dry weather persists for longer than normal.
(Source: Bundesanstalt fur Gewasserkunde)
Additional reporting by Helena Strathearn, Nel Weddle, Melissa Hurley, Katherine Sale, Clare Pennington)
(Picture source: REX/Shutterstock)