Record-Low Rhine Disrupts Europe's Chemical Industry

Europe's most important inland waterway for chemicals is running at levels never recorded before. After a summer of repeated heatwaves and drought, the gauge at Kaub, the shallowest point of the Rhine between Mainz and Koblenz, fell to 4 cm on September 24, 2026, the lowest reading since records began in 1880. On September 26 the gauge dropped below zero for the first time in its history, reaching minus 3 cm. It recovered to 2 cm on Monday, September 28, slipped back to 0 cm late that evening and stood at 5 cm early on Tuesday, September 29, according to data from the German Federal Waterways and Shipping Administration (WSV). The agency has said the September figures still have to be verified, but that raw data suggest historical records are being broken.

The Kaub gauge does not measure the real depth of the river, as the channel is more than one metre deeper than the reading, but it is the benchmark barge operators use to decide how much cargo they can carry without running aground. Its low-water reference level is 77 cm. By September 24, the Rhine had already spent 74 days below 78 cm this year, according to Volt Power Analytics, far more than the 41 days recorded during the 2022 crisis. European climate monitoring data also show the Rhine, the Danube and the Vistula posting their lowest seasonal flows since the series began in 1992.

The Rhine is the main inland route connecting the seaports of Amsterdam, Rotterdam and Antwerp (ARA) with Germany's largest chemical clusters in Ludwigshafen, Leverkusen, Dormagen, Cologne and Wesseling. BASF, INEOS, LyondellBasell and Shell operate steam crackers along this corridor with around 3.1 million tons per year of combined ethylene capacity. BASF's Ludwigshafen complex, located upstream of Kaub, moves about 40% of its incoming and outgoing goods by river, which makes it one of the most exposed industrial sites in Europe.

Barge capacity has collapsed. Under normal conditions a standard Rhine barge carries between 2,000 and 5,000 tons, but market reports indicate that loads passing the middle Rhine are now limited to roughly 450 to 700 tons. A tanker barge able to carry about 1,200 tons as far as Duisburg can take only around 460 tons through Kaub. Since August, shipping brokers have warned that the Kaub stretch is effectively impassable at times, with barges stuck on the Upper Rhine unable to return to the ARA ports and vessels from the coast unable to continue upstream.

Transport costs have risen sharply as a result. The assessed barge rate from ARA to Karlsruhe climbed from about 45 euros per ton at the end of June to around 215 euros per ton by late August, while the ARA to Basel route reached 275 euros per ton in mid-August. Across the region, chemical companies now report overall logistics costs of 2.5 to 3 times normal levels. After the gauge dipped below zero over the weekend, freight on the Rotterdam to Karlsruhe tanker barge corridor jumped by about 15% on Monday, September 28, and German diesel prices have risen by around 17 euro cents per litre in a month.

Rail and road cannot fill the gap. The right-bank Rhine railway between Troisdorf and Wiesbaden, one of Germany's main north-south freight corridors, has been fully closed since July 10 for a major renewal by DB InfraGO and is scheduled to reopen only on December 12, 2026. Freight trains are being diverted to the left-bank line and to the Siegen route, both of which are running close to full capacity. Road haulage is also tight, so only part of the cargo that normally moves by barge can be shifted to land transport.

The drought is also hitting production directly. Low river flows and warm water limit the cooling systems that steam crackers and other large units depend on, forcing several plants along the river to run at reduced rates. Shell's cracker in Wesseling, with capacity of 310,000 tons per year of ethylene, has been offline since early July, according to market participants cited by S&P Global. At Ludwigshafen, BASF can only return cooling water to the Rhine within strict temperature limits, which constrains output during hot and dry periods.

A chain of force majeure declarations has followed. LyondellBasell declared force majeure on its 170,000-ton-per-year butadiene extraction unit in Wesseling effective July 16, after low water prevented enough feedstock from reaching its crackers. At the end of July, BASF chief executive Markus Kamieth warned that product shortages could not be ruled out. The group then declared force majeure on several European surfactants because of disrupted raw material deliveries, and on two plasticiser products made in Ludwigshafen. In August, Covestro declared force majeure on polyols, a key ingredient for foams, at its Dormagen site, while Lanxess was reported to have done the same for a plastics intermediate produced in Uerdingen.

Butadiene, used to make synthetic rubber for tyres, hoses and seals, is the most affected olefin market. The traditional river trade has been largely blocked, buyers are restocking by rail and Central European producers with good land connections are receiving more orders. According to S&P Global Platts figures cited in market reports, the average FOB Rotterdam butadiene price reached about 1,184 dollars per ton in September, up from about 1,027 dollars in August. Propylene output has been held back by low stocks of naphtha and LPG at inland crackers, while ethylene, which moves mainly by pipeline, has been far less affected.

Aromatics are also tightening. Loading problems, restricted feedstock flows and cooling limits have reduced benzene availability, and the average CIF ARA benzene price rose to about 1,264 dollars per ton in September from around 1,103 dollars in August. Styrene buyers are spread across Europe and can more easily switch to trucks and trains, but phenol and acetone production relies heavily on the Rhine, leaving German supply short and German prices the highest in Europe.

In methanol, the loss of barge capacity has slowed port throughput and pushed utilisation of the main storage tanks in the ARA region above 90%, leaving suppliers searching for extra spot storage. Producers are running plants at low rates rather than shutting them down, largely because of high restart costs and support from German natural gas subsidies.

The fuel and naphtha markets show a split picture. Gasoline stocks at the ARA hub fell by about 3.4% to around 1.02 million tons in the week to September 24, a low level for the season that is supporting refining margins. Naphtha stocks rose by about 7% on the week to roughly 302,000 tons but remain around 41% below the level of a year earlier. Much of the imported naphtha is building up at coastal terminals because it cannot be moved upriver to inland German crackers, creating a regional mismatch between supply and demand.

The wider economic cost is significant. The Kiel Institute for the World Economy (IfW) estimates that when the Kaub gauge stays below 78 cm for 30 consecutive days, as happened in 2018 and 2022, German industrial production typically falls by about 1%. So far the broader German economy has proved more resilient than expected, but the chemical sector, already weakened by high energy costs, weak demand and strong foreign competition, is bearing the brunt of the disruption.

The short-term outlook remains difficult. The German Federal Institute of Hydrology expected the Kaub gauge to slip below zero again on the evening of September 29, and dry weather is forecast across the region this week. Levels are expected to start recovering in early October, but ING economist Rico Luman warns that low water could persist well into the month. European chemical producers have built contingency plans since the low-water crises of 2018 and 2022, yet rail and road capacity has firm limits. If the extreme conditions last several more weeks, analysts expect new force majeure declarations, tighter regional supply and higher delivery costs in the fourth quarter.

The situation has also revived criticism of the delays affecting the federal project to deepen the Middle Rhine bottlenecks around Kaub, which has been under consideration since 1992 and is still not complete.