Shipping prices rise as Rhine water in Germany falls again, water level hits output at Staudinger 5 and Datteln 4 plants

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HAMBURG, (Reuters) – Water levels on the river Rhine in Germany fell again in hot, dry weather this week and cargo vessels are sailing with reduced loads with transport prices rising, vessel brokers and commodity traders said on Wednesday.

Shallow water is hampering shipping on the entire river in Germany. Water at the chokepoint of Kaub near Koblenz is especially low and some vessels are only sailing about 25% full, commodity traders said.

“Vessels are continuing to sail, it is up to the vessel owners to decide whether there is deep enough water to navigate and whether it is commercially viable for them,” said a spokesman for German inland navigation authority WSA. “The authorities do not order navigation to stop during low water.”

The reference waterline level at Kaub fell to only 61 centimetres on Wednesday, vessels need about 1.5 metres of waterline to sail fully loaded.

“The reference waterline measurement is not always the water depth and there is still a navigation channel about 1.7 metres deep available at Kaub on Wednesday,” the authority spokesman added.

But fewer vessel owners are able or willing to pass through Kaub and spot prices are rising to compensate for sailings with much reduced loads, one cargo broker said.

Spot prices for a liquid tanker barge from Rotterdam to Karlsruhe south of Kaub rose to about 87 euros ($88.61) a tonne on Wednesday, up 7 euros on the day and up from only around 20 euros a tonne in June before water levels fell.

The Rhine is an important shipping route for commodities including grains, minerals, chemicals coal and oil products including heating oil.

German companies faced supply bottlenecks and production problems in 2018 after a drought and heatwave led to unusually low water levels on the Rhine.

Meanwhile,  low water levels on the Rhine, Germany’s main shipping artery, will affect output over the coming month from major coal-fired power stations, one east of Frankfurt and another in the northern Ruhr area, notes on the website of power bourse EEX showed on Thursday.

The Staudinger 5 plant has 510 megawatts of capacity and is operated by Uniper and situated on the Main, a major Rhine tributary.

Its output may be irregular until Sept 7 “due to a limitation of coal volumes on site” caused by the low level of the Rhine, according to the document on EEX’s transparency site.

Another document posted late on Thursday morning said the 1,100 MW Datteln 4 plant may also see irregular output to Sept 7 due to water levels.

Germany last month agreed to reactivate its coal-fired power plants or extend their lifespans in response to its worst energy crisis in generations, triggered by dwindling supplies of Russian gas. 

But shallow river levels following a hot, dry summer mean that barges taking coal feed stock to generating plants can only sail with partial loads. Similar conditions caused a fall in output at power stations and hit profitability at chemical manufacturing plants in 2018.

A reference Rhine waterline level at Kaub WL-KAUB, where vessels need about 1.5 metres of clearance to sail fully loaded, fell to only 55 centimetres on Thursday.

Kaub hit 25 cm at one point in 2018.

A heat wave this week has also boosted transport prices on the river as fewer vessels can travel on it and pass through choke points, tightening transport space.

Low water likewise affects power prices EL/DE as well as other commodities such as mineral oil products and grains.

Warming rivers in recent weeks have also curtailed French supplies of cooling water to nuclear plants, contributing to tightness in the European power system and driving up spot electricity prices.

A part of an old Rhine arm with low water level at the Rhine river in Ketsch near Mannheim, Germany, 04 August 2022. The river level in Speyer has currently dropped to 211 centimetres. The German Weather Service (DWD) expects the heat wave to peak in the coming days, with temperatures between 34 and 38 degrees Celsius predicted in large parts of Germany. In the southwestern part of the country even the 40 degrees Celsius mark is expected to be exceeded locally. EPA-EFE/RONALD WITTEK

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