As mainland Europe endures a severe summer heatwave and drought, chemical logistics disruptions are intensifying along the Rhine — one of the continent's busiest inland freight corridors, carrying chemicals, coal, grain, and oil products between production hubs in Germany and Switzerland and the North Sea port of Rotterdam — while critically low water levels on the Danube and other waterways have forced widespread shutdowns of nuclear power facilities.

Rhine Water Levels Hit Record Lows

Prolonged dry weather across Europe has sharply reduced water flows into the Rhine, pushing levels to record lows and causing cargo loadings to drop below 20% of normal capacity in some areas. The situation echoes the severe Rhine drought of 2018, when comparable disruptions to chemical and fuel logistics prompted some shippers to charter shallow-draft vessels and revisit contingency planning for low-water periods.

At Kaub — one of the river's shallowest points — water levels fell to a record 19 centimetres (cm) on 5 August and are forecast to decline further to 18cm by 9 August. The long-term average depth at this location is approximately 200cm. The previous lowest level recorded since the start of the millennium was 25.28cm on 22 October 2018.

With no end to the drought in sight and August typically among the hottest and driest months of the year, conditions are expected to deteriorate further. Reducing barge loads and switching to alternative transport modes adds delays, raises logistics costs, and reduces overall capacity. The impact is likely to be amplified by September if demand and operating rates rise following the summer lull.

Force Majeures and Logistics Disruptions

On 5 August, BASF declared force majeure on the supply of several surfactants from its European sites, according to a customer letter seen by ICIS. Force majeure is a standard contractual provision that relieves suppliers from liability when extraordinary events beyond their control prevent them from meeting delivery obligations. The declaration followed disruption to raw material deliveries caused by logistics constraints linked to low Rhine water levels, with the initial declaration dated 29 July. The company did not respond to a request for comment.

On 31 July, multiple market participants reported that Lanxess had declared force majeure on phthalic anhydride (PA) production at its Uerdingen facility in Germany. Market sources linked the declaration to low Rhine levels affecting the movement of orthoxylene (OX) feedstock barges supplying the site. Lanxess did not confirm this.

On 23 July, ICIS reported that low Rhine water levels had disrupted logistics from LyondellBasell's site in Wesseling, Germany. A force majeure on butadiene (BD) was declared, according to market sources, though this was not confirmed. The sources added that allocations were expected from August.

Earlier, on 16 July, BASF declared force majeure on diisononyl phthalate (DINP) and dipropyl heptyl phthalate (DPHP) at Ludwigshafen, Germany, citing production disruptions from extreme hot and dry weather as well as significant logistics constraints caused by low Rhine water levels, according to a customer letter seen by ICIS. BASF declined to comment.

In European BD markets, critically low Rhine water levels have compounded supply-side pressures amid logistical and production constraints. With rail capacity limited and barge economics deteriorating, producers face higher logistics costs and reduced supply chain flexibility, with implications for ethylene, propylene, BD, and related derivatives.

In European isopropanol (IPA) markets, low Rhine water levels are severely limiting barge loadings and adding pressure on alternative truck and rail logistics. However, weak demand is contributing to lengthy conditions by placing little pressure on European stocks.

BASF CEO Markus Kamieth stated last week that the company could face product shortages or additional force majeures, as it relies on the river for transport. Kamieth described how chemical sites and clusters often operate within complex Verbund structures and value chains, where the absence of even a single raw material can create ripple effects that place significant stress on production systems.

Methanol and Other Markets Affected

A European methanol buyer told ICIS that they have sufficient inventory for two to three more weeks but will face difficulties once stocks are depleted. The buyer said: "Barges cannot deliver at the moment — we already switched to truck delivery at the moment, so it's a mess because we were not prepared for truck delivery."

With barges operating at only 200–300 tonnes rather than the usual 1,000 tonnes, some Rotterdam terminals have extended their opening hours to assist customers during August.

A fatty acids buyer told ICIS that low water levels mean containers are stuck in ports and cannot be transported. The buyer added that Germany's rail system is also operating at reduced capacity due to maintenance works. Road transport faces additional challenges, as the holiday season has reduced the number of available drivers.

European polyol producers are also experiencing issues from low Rhine water levels, with some reporting that material could not be unloaded at a production site. Supply of certain special polyol grades is being impacted, according to market sources.

Drought and Heat Impact on Power Generation

Energy companies across Europe are on high alert as persistent drought, above-average temperatures, and widespread wildfires threaten to curb nuclear and hydropower generation while boosting gas demand amid tight market conditions. Nuclear plants depend on large volumes of river water for cooling, and regulations prohibit operators from discharging water back into rivers above certain temperature thresholds — meaning that during heatwaves, plants must reduce output or shut down entirely to comply with environmental rules.

Data compiled by ICIS shows that approximately 7 gigawatts (GW) of nuclear capacity was offline in France, Hungary, and Romania in late July — equivalent to roughly 10% of the EU's total installed nuclear capacity — due to exceptionally low river levels and persistent heat. France, which typically generates around 70% of its electricity from nuclear power, is particularly exposed to such cooling-water constraints.

Source: ICIS, by Will Beacham