Low Rhine Water Cuts Naphtha Supply and Triggers Butadiene Force Majeure in Germany

Germany's petrochemical industry is running below normal capacity because the Rhine, the country's main inland freight artery, has dropped to some of the lowest levels ever recorded for July. Barges cannot load fully, feedstock is not reaching inland steam crackers in sufficient volume, and at least one major producer has already invoked force majeure on butadiene supply.

LyondellBasell declared force majeure on supplies from its butadiene extraction unit at Wesseling, near Cologne, with effect from 16 July 2026 and no end date announced. The unit can produce about 170,000 metric tons of butadiene a year. The company linked the declaration to low river levels, which have limited deliveries of naphtha to its crackers and cut output of crude C4, the mixed stream that butadiene is extracted from.

The Wesseling area has been hit twice. Market participants report that Shell's steam cracker at the same location has been offline since early July. That unit can make 310,000 metric tons of ethylene and 165,000 metric tons of propylene a year. Neither the cause nor the expected restart date has been confirmed publicly.

The trigger is hydrological. The navigable depth at Kaub, the shallowest point on the Middle Rhine and the reference gauge for the whole corridor, fell to just over 40 centimetres in the week of 13 July, a level at which bulk shipping is usually suspended. Rain in southern catchment areas brought a short reprieve. The German inland navigation agency WSV recorded a recovery to around 81 centimetres on 20 July and forecast 93 centimetres for 22 July. The relief did not last. On 23 July the navigable depth fell back by 14 centimetres to 63 centimetres, and dry weather in the southern catchments points to further declines. Earlier in the week, some market reports had warned that levels could move back toward the all-time record of 25 centimetres set in October 2018.

Loading limits explain why a few centimetres matter so much. Below 150 centimetres, barges rated above 2,000 metric tons have to cut cargo to sail safely. Below 135 centimetres, loads are typically halved. Below 75 centimetres, they can be cut by as much as three quarters, which means four vessels are needed to move what one vessel normally carries. Traders said on 23 July that ships were often sailing only about 20 percent full.

Freight economics have moved sharply. Tanker barge rates from Rotterdam to Karlsruhe rose to roughly 125 to 130 euros a metric ton by 20 July, against 60 to 70 euros the week before and about 45 euros at the end of June. Shippers unable to fill a barge also face dead freight charges, which is the cost of booked capacity they cannot use. Several buyers have shifted volumes to rail cars and trucks, an option that costs more but is easier to plan around.

Low flow creates a second constraint. Warmer and thinner river water is less effective for the cooling units attached to steam crackers, so operators face pressure to reduce rates even when feedstock is available.

A separate incident added to the strain. A fire broke out on 15 July in a diesel desulphurisation unit at BP's Scholven plant in Gelsenkirchen. The company reported no injuries and no danger to the surrounding population, and the blaze was brought under control the same evening. The cause remains under investigation. Downstream phenol buyers reported reduced short-term allocations after the incident, with one buyer receiving 10 rail cars instead of the usual 15 and the balance deferred to a later period.

Pricing reflects pressure on both sides of the chain. Platts assessed naphtha at 838.25 dollars a metric ton FOB Rotterdam barge on 22 July. European C4 olefin producers and domestic buyers settled August contracts 50 euros a metric ton lower month over month on 23 July, after four days of talks, as soft downstream demand outweighed the production losses.

The impact reaches beyond chemicals. Thyssenkrupp Steel suspended its own barge operations and slightly reduced blast furnace output at Duisburg because of restricted raw material deliveries. German refineries receive most crude by pipeline but rely on the river to distribute finished fuels, and the German Economic Institute has estimated that a full Rhine closure would require about 3,000 extra road tankers a day.

The corridor matters because it links Swiss and southern German industry to the Amsterdam, Rotterdam and Antwerp port cluster, passing major chemical sites at Ludwigshafen, Leverkusen, Cologne and Wesseling. Restoring unrestricted navigation would take several weeks of steady rainfall across the Alpine and upper Rhine catchments, and nothing in current forecasts suggests that is close. Buyers of butadiene, ethylene, propylene and their derivatives should plan for constrained European supply through August and secure road and rail capacity in the Rhine basin now rather than during the next drop.