Rhine water levels to drop further after driest June since 2018
Quantum Commodity Intelligence – Rhine water levels are set to drop further over the weekend and will struggle to rebound for the rest of July as Germany faces a continued lack of rainfall following its driest June since 2018.
After hovering at around 120 cm so far this month, the watermark at the middle-Rhine chokepoint of Kaub is set to drop to below 100 cm by the middle of next week, data from the German Federal Waterways and Shipping Administration (WSV) showed Friday.
The data means that water levels so far this month are already at their lowest since at least 2000 and are dropping further.
Current levels beat both last year's early July average of 146 cm, the 138 cm recorded during the drought year of 2018 and the 10-year average of 227 cm, historic WSV data showed.
The falling water levels along Europe's busiest waterway come after Germany faced its driest month of June since 2018, according to data from the German weather office (DWD), with more dry weather in the forecast.
That will cause the watermark at the rocky shallow part of the Rhine between Koblenz and Mainz to drop further to 90 cm by the middle of July and will remain below 100 cm until at least early August, the mid and longer-term WSV forecasts show.
2018 memories
The recent dynamics are reviving bad memories from the severe 2018 drought when the water level at Kaub fell to a record low in November, causing a 1.5% drop in German industrial production and a 0.4% drop in GDP, the Kiel Institute (IfW) estimated at the time.
When asked if the Rhine is facing a similar fate this year to 2018, Rhine expert and senior shipbroker, Jelle Vreeman, told Quantum: "I do predict it to be that way, drought levels are already at the same level as last year."
"There was little snowfall in the Alps this winter. This ensured less meltwater draining into the Rhine these months, something that was not the case in 2018," Vreeman added.
Long periods of dry weather have already been predicted in southern Germany and the Alps, meaning it will "undoubtedly be tricky again" with regard to water levels and intakes.
"I can imagine that around this time oil majors are looking again for short-term time charters to at least secure capacity as far as possible. A logical step," he concluded.
Intakes and rates
River barges passing Kaub to bring anything from oil products to biofuels between Rotterdam and Southern Germany and Switzerland were already limited to a maximum intake of 1,290 mt at the start of this week.
The drop to below 100 cm will likely restrict intake levels to below 1,000 mt to ensure barges can still pass.
That compares to a more usual level of 2,500 mt, further limiting barge capacity and likely pushing freight rates higher this summer.
"Rates for destinations in the Upper and Middle Rhine can be seen to continue their upward trend throughout the week due to lower water levels," barge brokerage Riverlake said.
On top of that, higher freight demand and longer waiting times within the ARA port hub, are limiting capacity further.
The barge rate between Rotterdam and Karlsruhe, 160km south of Kaub, stood at €43/mt ($46.8/mt) on Friday, while the one to Birsfelden, near the Swiss town of Basel, reached CHF 59/mt ($65.9/mt), both at their highest since March.
Last August, when the water level at Kaub dropped to 30 cm, the rate to Birsfelden soared to over CHF 250/mt.