Falling water levels on the Rhine, the key Northwest European waterway, is putting upward pressure on clean barge freight rates into central Europe, traders said Wednesday, Platts reports.
The lower Rhine levels mean that barges cannot be loaded to full capacity due to the risk of grounding.
"Barges are loading 1,000-1,3000 mt," a barge trader said, referring to a barge that would typically load around 2,000 mt.
"The Rhine [water levels] are going lower and lower," the trader said. "Looking at the forecast, rainfall is lower than usual for this time of year."
Water levels are lowest in the west of Germany at Kaub, where on Wednesday they were at 124 cm, down 8 cm from Tuesday morning and down from 155 cm a week ago, while at at Koblenz levels were at 123 cm, up 1 cm on the day but down from 146 cm a week ago, according to data from the German waterways authorities.
Clean barge freight rates from Rotterdam to Karlsruhe, further up stream from Kaub and Koblenz, have risen $1/mt week-on-week, according to Platts data, and traders say that rates are set to climb further.
Some buyers of distillates into Switzerland said that the lower Rhine water levels meant that interest to import material was down because of the increased freight costs and that they were opting to source material from domestic production.
"Water levels are falling but as there is no demand, nobody cares freight rates are a tad higher," another trader said.
The FOB Rotterdam 10 ppm barge premium to front month ICE 0.1% gasoil futures was assessed at $38.50/mt Tuesday, a day-on-day climb of $1/mt. Meanwhile the 0.1% gasoil barge differential rose $0.50/mt to be assessed at minus $3.50/mt, and the jet premium to the gasoil futures rose $1.50 over the same time to $83.75/mt, Platts data shows.
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