Low water levels in the Rhine place an increasing burden on the economy

0
25

The most important German waterway, the Rhine, carries too little water. The transport of gas is endangered, coal transport is no longer guaranteed. Production throttling is no longer excluded.

Low water on the Rhine

Due to the low water on the Rhine, material bottlenecks, high  Energy costs and the weakening world economy plagued German industry. “Since mid-July, the water levels in the Rhine have been so low that they are noticeably affecting freight traffic,” said Nils Jannsen, economic expert at the Kiel Institute for the World Economy (IfW), on Friday.

In the past, industrial production was pushed down by around one percent when water levels fell below a critical level for a period of 30 days. “In 2018, when shipping on the Rhine was last hampered by low water for a long period of time, industrial production was down by around 1.5 percent at its peak,” said the expert. “However, additional burdens could result from the fact that inland shipping is a relatively important means of transport for energy resources.”

The less water there is in the river, the shallower the water depth and the narrower the fairway – here near Düsseldorf

Coal transport at risk

The water level on the Rhine has recently fallen due to the hot summer weather and a lack of rain fell further. The water level at the Kaub narrows near Koblenz is particularly low: the reference water level is only 56 centimetres. But ships need about 1.5 meters to be able to drive fully loaded.

“We continue, but can only load about 25 to 35 percent of the ship's capacity,” said the director of the shipping cooperative DTG, Roberto Spranzi, which operates around 100 ships on the Rhine. “This means that customers often need three ships to transport their cargo – instead of just one.”

The spot price for a liquid tanker from Rotterdam to Karlsruhe, south of Kaub, rose to around 94 euros on Friday per ton. That is an increase of two euros on the previous day, said ship brokers. In June only 20 euros per ton had to be paid.

Coal supply becomes more difficult

The authorities do not close the river at low water. They leave it up to the ship operators whether they want to continue sailing on the Rhine or not. “We will continue as long as it is navigationally possible,” said Spranzi. The ship capacities are already tight because the demand has increased. One reason for this is that Germany wants to increase electricity generation from coal to prepare for reduced gas supplies from Russia.

The Rhine is an important shipping route for commodities such as grain, chemicals, minerals, coal and oil products including fuel oil. Companies keep a close eye on water levels. Levels in the range of 30 to 35 centimeters are forecast at the Kaub gauge for the next two weeks, so that some types of ship can then no longer be used, said a BASF spokeswoman. The production of the chemical company is currently not affected. “However, we cannot completely rule out reductions in the production rates of individual plants for the next few weeks.”

The Chemical giant BASF can no longer use larger types of ships at its Ludwigshafen site on the Rhine

The little water is still too warm

According to its own statements, the steel group Thyssenkrupp has taken various measures because of the low water. “Our raw material requirements are currently secured on this basis,” says the group. The chemical company Evonik said production was ongoing. “At Evonik, there are currently no significant restrictions on our logistics chains due to low water levels in the Rhine.” Wherever it makes sense and is technically possible, Evonik is taking precautionary measures, for example by stockpiling raw materials.

The energy company Uniper had already warned on Thursday that the low water was endangering coal supplies for important power plants. Irregularities could therefore occur in electricity production at the Staudinger power plants in Hesse and Datteln in North Rhine-Westphalia up to September 7.

In Switzerland, cooling water problems are currently affecting electricity production. Because the water temperatures in the Aare are too high, the energy company Axpo has to reduce production at the Beznau nuclear power plant with its two blocks, each with 365 megawatts, until August 12th – by half, according to a note on the EEX wholesale exchange.

dk/hb (rftr)