Fuel recession feared at low Rhine level
A ship lay dry between the Grönes on the Rhine near Düsseldorf.
Photo: Federico Gambarini/dpa
Several companies along the Rhine obtain industrial raw materials by ship. But the water level is falling, deliveries are being delayed and costs are rising. This can have very negative consequences.
London. Transport problems in industry as a result of the Rhine depression could put additional strain on the German economy.
While low water is a much smaller problem than the looming gas crisis, if it persists into December it could cost economic growth by 0.2 percentage points in the third and fourth quarters, said Andrew Kenningham, chief economist at British analyst firm Capital Economics. , according to a study. This increases the likelihood of a recession.
According to Kenningham, rivers are more important transport routes for Germany than for most western European countries. While the share of total freight volume has fallen, it still accounts for a good 7 percent of the total volume around 2020 – and much of this comes from industrial commodities such as coal, crude oil, coke and basic chemicals.
Road and rail transport costs more and takes longer
Theoretically, the transport of goods will be shifted to road and rail as soon as the use of water becomes unprofitable. The lower the water level, the fewer the ships can load and above a certain level, many cannot sail at all. However, transport by road and rail involves additional costs and is usually slower for large quantities.
It can also be problematic for power plants and industrial companies that discharge hot cold water into the Rhine. For example, the chemical company BASF is only allowed to discharge cold water with a maximum temperature of 33 °C into the Rhine in the summer months – as long as the temperature has not yet reached the 28-degree mark.
Since the very dry summer of 2018, companies have been taking precautions that also place a heavy burden on shipping on the Rhine and cost the steel and chemical industry a lot of money.
more and new ships
Ute Wolf, CFO of the Essen-based chemical group Evonik, calmed down recently at a conference call with analysts: The group was less affected by the situation on the Lower Rhine and had also taken precautions, for example by ordering more cargo ships. By booking because they could carry less cargo at low tide.
In view of the location of the Rhine, according to analyst Martin Kohlheisz from the rating agency Moody’s, this should also apply to Covestro, LANXESS and Bayer. Companies further up the Rhine, such as the Ludwigshafen-based company BASF, will be more severely affected.
BASF relies on low-water vessels. The flagship is to be a new type of tanker with a high deadweight capacity, which can still pass the critical section of the Rhine in the Kaab with 650 tons of cargo even at a water level of 30 cm. The level serves as a guide, but differs from the water level in the fairway.
On Thursday, the level was still around 45 centimeters and, according to the Federal Institute for Hydrology, should fall below the 40 centimeter mark in the coming days.
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