Rhine Nears Critical Level
Shippers prepare for the worst in Germany as Water Level on the Rhine River is at a Critical Level.
Shipping companies prepared to halt the transport of goods on the Rhine as water levels in Germany’s biggest river neared a critically low point Saturday.
An ongoing drought affecting much of Europe has lowered rivers such as the Rhine, preventing large ships with heavy loads from passing key waypoints and forcing them to use smaller vessels or to split cargoes into multiple shipments.
At one bottleneck, near the town of Kaub on the Middle Rhine, an official gauge measured the water level at 37 centimeters (14.6 inches) on Saturday afternoon. Big, heavy ships can’t pass if the level falls below 40 centimeters (15.7 inches).
Logistics company Contargo said Friday that it was preparing to halt shipping on the Upper and Middle Rhine for safety reasons and planned to shift some of its cargo onto trucks. Road and rail freight capacity is limited, however.
Companies along the Rhine that rely on ships to receive raw materials and deliver finished goods are expected to face delays and shortages. Coal-fired power plants and gas stations could also see supply shortages, if shipping on the Rhine is halted.
Rhine is Shrinking
CNN reports the Rhine is Shrinking, Endangering Europe’s Top Economy.
Recently, Germany has resorted to firing up its coal power plants to ensure that the country retains access to electricity as Russia restricts gas supplies.
But “much of the needed hard-coal is transported from the Dutch ports of Amsterdam, Rotterdam and Antwerp by barges” along the Rhine river, adding pressure to capacity there, Deutsche Bank economists noted.
According to Henri Patricot, an oil analyst at UBS, the river’s falling water levels “is challenging shipments of energy products, which is aggravating the commodity supply situation in Europe.” The Rhine is also crucial for transporting chemicals and grain.
Researchers at the Kiel Institute for the World Economy have previously found that in a month of low water, the country’s industrial output can fall by about 1%.
Rhine to Recede Further as Climate Crisis Adds to Energy Crunch
Bloomberg reports Rhine to Recede Further as Climate Crisis Adds to Energy Crunch
A key water marker at Kaub — where the river is narrow and shallow — is poised to fall to 30 centimeters (11.8 inches) by Monday and drop further in subsequent days, according to German government data. At 40 centimeters, a level it reached Friday, it’s not economical for many barges to transit the chokepoint.
German utility EnBW Energie Baden-Wuerttemberg AG has enough coal to supply its power stations for the winter, even with disruption to shipments. Another power producer, Uniper SE, has warned that it may have to cut output at two key coal-fired power plants in Germany as it struggles to get fuel supplies along the river.
Stockpiles of diesel and heating oil in independent storage in the ARA region are currently at their lowest seasonal level since at least 2008. A shallower river makes it harder to ship this important fuel into inland Europe.
Not Just Germany
The Wall Street Journal reports Europe’s Key Rivers Fall to Critical Levels, Aggravating Energy Crunch
In Germany, the Rhine is at critically low levels, hampering deliveries of coal and industrial goods, and is forecast to potentially become impassable for most barges at a key stretch by the end of the week.
In France, the Rhône and Garonne have been too warm to cool nuclear reactors, leading to lower output. In Eastern Europe, Danube levels are dwindling, impeding a key Ukrainian grain route.
“This is clearly making Europe’s energy problems worse,” said Fabian Skarboe Rønningen, senior analyst at consulting firm Rystad Energy. “Low river levels and warm water temperatures affect both German coal and French nuclear power, two of the largest sources of supply in Europe.”
In Eastern Europe, shipping via parts of the Danube, which drains into the Black Sea, has become largely uneconomical since vessels can only operate at around a third of their capacity, said Bulgarian captain Alexander Kamenov, whose ship, the Adora, is currently stuck at port.
With Germany relying more on coal, much of the needed supplies are transported from the Dutch ports of Amsterdam and Rotterdam, as well as Belgium’s Antwerp, by barge. The coal reserves at most power plant sites are currently only sufficient for about one week of full-load operation, according to Marc Schattenberg, senior economist at Deutsche Bank Research. Last year, the country imported nearly two thirds of its coal via the river.
Shipper DTG Deutsche Transport Genossenschaft eG said its vessels were currently operating at as low as 25% of capacity. “Customers now need to charter up to four ships to transport the same amount of goods as before,” said DTG manager Roberto Spranzi.
Freight rates from the mouth of the Rhine in the Netherlands to Basel in Switzerland reached 240.32 euros, equivalent to $248, a metric ton last week, more than doubling from €111.92 a month ago, according to Lars van Wageningen, manager of operations at commodity market-research firm Insights Global. Quotes a year ago were just €11.28 a metric ton.
Grain is now Shipping from Ukraine
Here’s an interesting paragraph that caught my eye.
“Fewer ships are available, with demand rising both because of coal’s resurgence but also because many European ships are currently in the Black Sea region.”
Did Putin purposely allow Ukrainian grain shipments to begin to enhance the shipping problems of Germany’s industrial sector?
Regardless, there is going to be a big spillover across all of Europe.
UK Average Electricity Cost Will Soar to $5,370 Per Year By 2023
Yesterday I noted UK Average Electricity Cost Will Soar to $5,370 Per Year By 2023.
The average household makes £31,400 but will spend £4,400 on electricity in 2023.
If accurate, that’s 14% of the entire after tax budget just for electricity. Britons will have to choose between heat and eat.
Global Outlook
Electricity costs are rapidly escalating in Europe, barge costs are up to $248 from €11.28 ($11.58), barge shipping may soon be impossible at ay cost, France is throttling nuclear power because of river cooling capacity.
Meanwhile, China’s property bubble is imploding.
In the US, the housing boom is imploding thanks to rising mortgage rates. And finally, US Industries Are Buckling Under Pressure of Surging Electricity Costs
Yet, delusional people believe the US will avoid a recession.
This post originated on MishTalk.Com.
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Mish
Lake Mead will never fill again as the population it serves is much too large for the amount of water it gets, regardless of droughts. It does rain in the US but interestingly not everywhere gets the same amount of rain. The weather forecast for Berlin is pretty wet next week. It’s always driest before the storm.