German refineries along the Rhine are running below capacity due to low water levels hindering shipping activities, sources said.
Rhine water levels are currently pegged around 50 cm by WVS, the German waterways authority, and are expected to remain around that level until Saturday. Double-hull barges were unable to navigate past the key choke-point Kaub on the Upper Middle Rhine over the last few weeks and limited availability of single-hull barges drove freight rates along the Rhine higher.
Typically premium rates are applied for levels below 140-150 cm at Kaub, with no imminent solution to the transport issues seen as yet, sources said.
Freight rates from Rotterdam to Basel were assessed at $159.90/mt Monday versus $102.45/mt September 28. Exactly one year ago, on October 30, freight rates from Rotterdam to Basel were assessed at $26.60/mt, S&P Global Platts data showed.
High freight prices and restricted barge activity have led to disruptions for refineries situated along the river.
"Some [German] refineries had to reduce their production because they could not get rid of by-products via barges, so they are producing less volume of oil products," a diesel trader said Tuesday.
Traders active in the region said the Miro refinery near Karlsruhe was running well below capacity, although the plant was not immediately available to comment. Feedstocks could also not reach the refinery, nor were products able to be transported away due to the low Rhine levels, traders said.
Other refineries may also be affected by the low Rhine, with sources noting that refineries in Godorf, Wesseling and Gelsenkirchen are also running below capacity.
"They [refineries] are falling like dominoes," a trader said.
The Rhineland refinery which consists of the Godorf and Wesseling site said it was "regularly" reviewing "whether production levels need to be adjusted".
Early last week the Wesseling harbor could no longer be accessed by barges due to the low water levels but the company said it was using alternative routes.
The Gelsenkirchen refinery had said it wasn't affected but did not respond to a request for comment Tuesday.
