Falling water levels in Germany's Rhine River are increasing transportation costs and disrupting logistics, increasing pressure on the country's industrial sector, while local steelmaker Thyssenkrupp Steel has slightly reduced production in blast furnaces due to limited supplies of raw materials, according to a Reuters report.
Thyssenkrupp Steel adjusts production
Thyssenkrupp Steel told Reuters that the deteriorating water levels in the Rhine are affecting the supply of raw materials to its steel plant in Duisburg.
According to the company, it has slightly reduced production in blast furnaces due to the limited supply of raw materials. The company also suspended the operation of its own barges and instead chartered vessels with a lower draft to continue deliveries. The company added that supplies to customers are not currently at risk.
The cost of freight increases as ships reduce the amount of cargo loaded.
The Rhine is one of Germany's most important transportation routes for raw materials, fuels, and manufactured goods.
Intense heat and limited rainfall in Western Europe have led to a sharp drop in water levels, forcing cargo ships to operate with significantly lower carrying capacity. With current traffic volumes, a conventional Rhine container ship can overcome the bottleneck at Kauba by carrying less than 20 percent of its usual cargo. In response, ship operators imposed additional fees for shallow waters, which increased the transportation costs of cargo owners.
There is a risk of further disruptions.
The German Inland Waterways Agency expects the water level in the Kaube, a key shipping bottleneck on the Rhine, to drop below 50 centimeters. According to research by Deutsche Bank, freight traffic is usually suspended if the water level drops by about 40 centimeters or lower.
Author: Editorial staff of SteelOrbis
Steelorbis.com
