What the Rhine Takes Before It Takes Ethylene

Five days ago this desk wrote a sentence about the Rhine and got it wrong.

"Low water will not show up as force majeure letters this quarter. It shows up as freight, and freight shows up in Q3."

The letter already existed when we published that. LyondellBasell had declared force majeure on the 170,000 t/yr butadiene extraction unit at Wesseling, effective July 16 and until further notice, on low Rhine levels restricting the movement of feedstock to its crackers and cutting crude C4 and butadiene output. It surfaced in a customer letter seen by Platts on July 23, five days before we told you to expect freight instead.

So the correction is the story. Low water reached a contract this quarter, and it reached the one product nobody was watching.

The Letter Was Twelve Days Old Before the River Got Bad

Here is the part that should change how you read the next few weeks.

On July 16, the day the force majeure took effect, the Kaub gauge averaged 45 centimetres. That is a bad number. It sits five centimetres above the level at which freight navigation on that stretch becomes practically impossible, and it was enough to starve a cracker of naphtha.

The river then recovered. Kaub climbed back to an 85 cm daily mean on July 20, which is still poor and is nearly double where it sat when the letter went out.

And then it fell, and kept falling (chart below). Since July 27 the gauge has spent about 111 hours at or below 30 cm, and it printed 25 cm from late on July 30 into the morning of July 31, the low of the run.

It has not been above 33 cm since July 28. As of 11:15 this morning it reads 28 cm.

Run those through the navigable-depth arithmetic the WSV publishes, gauge + 1.90 m - 0.78 m, and the fairway at Kaub has gone from 1.57 m on the day of the declaration to 1.40 m today.

The condition that produced the force majeure has not eased. It has deepened by about seventeen centimetres of usable water, and the letter is still open.

No lifting notice was reachable on any route we tried.