London — Critically low water levels on the River Rhine, the main European shipping artery, are jeopardizing shipments of a wide range of different commodities, such as grains, chemicals and coal, and are affecting operations of both manufacturing and power generating plants along the river, which rely heavily on its waters for transportation and cooling purposes. This is creating acute imbalances between the coastal and inland markets and has already triggered declarations of force majeure on deliveries from some chemical and metals plants.

Though railcars and trucks are often considered an alternative to barge shipments along the Rhine, possible capacities appear to have been reached.

Rhine water levels at the key chokepoint of Kaub in Germany, dipped to 33 cm Friday, a record low, and with no rain forecast for the next few days the German water Authorities expect the levels to plunge to 23 cm by Monday.

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The following are the key facts across sectors and commodities:

SHIPPING

INFRASTRUCTURE

* Double hull barges unable to go in the Upper Rhine region.

* Maximum loading on a barge at Karlsruhe is about 500 mt.

TRADE FLOWS

* Upper Rhine almost no longer navigable.

* Inability to go past Kaub has freed up some tonnage for shipments in the lower Rhine.

PRICES

* Rates for shipping clean oil/petrochemical products from Rotterdam upriver soared to a three-year high, with the Rotterdam-Karlsruhe route now fetching just under $94/mt on 1,000-5,000 mt barges.

* Barge rates on the lower Rhine could ease amid better availability of barges which now can’t go past Kaub.

* Rates to barge coal have also increased multifold from usual Eur4-5/mt to Eur35/mt (about $40.20/mt).

PETROCHEMICALS

INFRASTRUCTURE

* BASF has declared a force majeure on 2-ethylhexyl acrylate, butyl acrylate and ethyl acrylate from its site at Ludwigshafen, Germany.

* Other chemical derivatives plants along the Rhine are struggling to source feedstocks, such as propylene or methanol, and this will continue affecting production rates.

TRADE FLOWS

* Where possible, traders have switched to alternative modes of transport, such as railtanks and trucks. Freight costs are rising across the board, pushing up prices for delivered chemical products.

* Stocks in import markets, such as methanol, are piling up in Rotterdam and simultaneously are creating shortages in Germany. In export markets, the converse is true with the Amsterdam-Rotterdam-Antwerp trading hub getting short, while length is building up the river.

PRICES

* Methanol prices in Rotterdam are under pressure, with spot shedding 7.6% over the past week, falling to Eur359/mt FOB Rotterdam Friday.

* Propylene prices are also falling with the spot price on the coast flipping from a premium to a 2% discount to the monthly contract price. It was last traded at a discount in the spring.

–Staff reports, newsdesk@spglobal.com

–Edited by Maurice Geller, maurice.geller@spglobal.com

https://www.spglobal.com/platts/en/market-insights/latest-news/shipping/101918-factbox-record-low-rhine-levels-bring-widespread-disruption-across-energy-and-commodities