London — A recovery in Rhine water levels has offered a respite for propane distributors in the German market, according to market sources, even as seasonal demand has remained relatively weak.
Water levels have risen rapidly in recent days, allowing fully loaded propane barges to pass through key choke points, including Cologne and Mainz, for the first time in months, according to a source.
On Tuesday, water levels at the key choke point of Kaub were about 152 cm, with levels expected to hit at least 200 cm by Thursday, according to the German waterways authority WSV. This compares with around 50 cm Monday and only 30 cm measured in the week ending Sunday.
Anything below 80 cm at Kaub is considered critical, and anything below 140 cm requires premium payments. That has resulted in a rapid drop in barge freight rates across several products.
Distribution issues that have dogged the German consumer market for months have eased, a source said, though the market was wary of whether rising levels might offer only a temporary reprieve.
Meanwhile, the impact on barge pricing in the Amsterdam-Rotterdam-Antwerp trading hub has so far remained relatively muted, with the FOB propane barge holding a $48/mt premium over CIF propane cargoes, as market sources say German refineries have sufficient product to meet still soft seasonal heating demand.
“So far people seem to be fine with contract tons,” said a market source. “It is still warm here.”