Germany chemicals face severe disruption as Rhine hits record lows

Chemical production has been curtailed or halted at companies which rely on the river Rhine to transport feedstocks or sales to customers. Water levels have reached their lowest ever recorded level at the Kaub measuring point, and are expected to continue falling.

EVONIK MMA CONTROLS

Evonik has implemented sales controls on European methyl methacrylate (MMA), due to critically low Rhine levels, the German producer said in a letter to customers seen by ICIS on Wednesday.

“Due to critically low Rhine water levels, the raw material supply to the production sites in Worms and Wesseling is limited, causing a significant reduction of our production rate [and] reducing the availability of our product VISIOMER MMA,” Evonik wrote.

Sales controls have been implemented with immediate effect, with lead times and shipping dates increased to 10 business days.

The producer had been running its Worms, Germany plant at a reduced rate because of the restriction of raw material, connected to the low water levels on the Rhine.

BASF FORCE MAJEURES

European spot prices for butyl acetate (butac) have risen amid the logistical challenges caused by the low water levels.

Butac prices were assessed at €1,200-1,250/tonne FD (free delivered) NWE (northwest Europe) – an increase of €30-40/tonne.

BASF has declared force majeure on butac at its Ludwigshafen, Germany plant due t a lack of feedstocks. It also declared force majeure on acrylate esters as a result of the low water levels.

There was talk that BASF’s Ludwigshafen site for downstream phthalic anhydride (PA) – which is mostly for captive use – had shut down or even declared force majeure. The company said it had not declared force majeure and declined to comment on the current production status.

However, there is confirmation of ongoing force majeure for downstream plasticizers diisononyl phthalate (DINP) and diisononyl cyclohexane dicarboxylate (DINCH) at the site. This has been in place since 3 August.

European PA players have said they are looking at business day by day due to the ongoing critically low water levels on the Rhine.

BASF has declared force majeure on the supply of n-butanol and isobutanol in Europe until further notice.

POM SALES CONTROLS

US chemicals major Celanese on Tuesday announced that it is implementing sales controls in the European, Americas and Asia regions for its polyoxymethylene (POM) engineered materials products, including all grades and specifications.

The company cited low Rhine water levels as a factor affecting its ability to meet POM product demand. The company relies on the river for shipping supplies of key raw materials into its POM plant in Frankfurt. Also impacting POM supplies are a series of turnarounds at Celanese-owned and co-supplier POM units, it said.

OX LOGISTICS HIT

European orthoxylene (OX) spot prices were assessed lower week on week after market participants confirmed spot levels are now largely holding a discount to the European contract price (ECP). The high end of the range was previously assessed at a premium to the ECP, reflecting the earlier tightness of OX market. As availability has now improved, levels were confirmed to average at a 4% discount to the ECP.

This has been largely due to the historically low levels on the Rhine. Due to high freight rates, downstream producers have been holding OX orders, which has in turn improved OX availability after a long period of tightness.

METHANOL DELAYED

European methanol spot prices receded from last week’s spike as extreme lows on the river bottle up deliveries from the Rotterdam hub.

Prices crashed by €25/tonne on the high end of the weekly ICIS range to €360-365/tonne FOB Rotterdam, as attention switched away from the detainment of a vessel carrying methanol from Venezuela en route to Europe.

US and European prices were boosted last week after authorities in Venezuela seized a tanker bound for Belgium carrying cocaine.

Rhine levels have trapped methanol in Rotterdam or higher up river. One metre is seen as a viable height for barges to carry fuller loads.

EUROPE CX STRUGGLES

The European cyclohexane (CX) market remains long due to ample supply which is being exacerbated by logistics issues on the river Rhine, according to sources on Wednesday. With historic low Rhine water levels ongoing shipments are unable to make their way up the river. The entire polyamide chain may be impacted.

• Katherine Sale, Nick Cleeve, Stefan Baumgarten, Yana Palagacheva, Linda Naylor, Eashani Chavda and Vicky Ellis contributed to this article