Low water levels on Germany's Rhine River are disrupting shipments of raw materials to chemical plants across inland Europe, forcing some producers to cut operating rates as rail, truck and pipeline networks struggle to make up for lost barge capacity, Kpler said in a Friday note.
Water levels at Kaub, a key monitoring point on the Rhine, rose to about 45 centimeters on Aug. 21 after falling below 10 centimeters earlier this week. Forecasts call for further improvement into September, but levels below 40 centimeters can still severely restrict shipping.
Chemical plants in Germany rely heavily on the Rhine to receive naphtha, a petroleum product used to make ethylene and other basic chemicals. About 4 million metric tons of naphtha a year typically moves from the Amsterdam-Rotterdam-Antwerp region to inland crackers by pipeline and barge.
Barge capacity has fallen to roughly 20% of normal levels over the past month, with some sections of the Upper Rhine effectively closed to commercial traffic earlier this month. The resulting shortages have forced several German chemical plants to reduce production.
LyondellBasell has declared force majeure on butadiene supplies from its Wesseling site, while Shell's Wesseling cracker has been offline since early July and is now expected to remain shut until the end of September. BASF also canceled some surfactant shipments earlier this month.
Alternative transportation options are limited. Replacing a single 1,200-ton butane barge would require about 27 rail cars, while rail terminals in the region are already operating near capacity. Trucking is also unable to absorb the displaced volumes.
BASF is deploying specialized low-draft barges that can operate in water as shallow as about 30 centimeters. The company is also expanding an intermodal terminal at its Ludwigshafen site to reduce its reliance on river transportation, although the project is not expected to be completed until 2028.
High water temperatures are creating an additional challenge by limiting the river's use for industrial cooling. BASF normally circulates about 5 million cubic meters of Rhine water through cooling systems at Ludwigshafen.
Meanwhile, inventories of naphtha and butane are building in the coastal Amsterdam-Rotterdam-Antwerp region as supplies struggle to reach inland plants.
A sustained recovery in Rhine water levels would allow chemical producers to increase operations and draw down those inventories. Forecasts indicate water levels at Kaub could reach about 77 centimeters in September.
Demand for butane is also expected to increase from the second half of September as refiners switch to winter-grade gasoline, potentially supporting prices even if Rhine shipping conditions remain difficult.