Rhine closure narrows to 76.5 km stretch in Germany, gasoil diffs steady
Quantum Commodity Intelligence - Just 76.5km of the Rhine in Germany is still closed to shipping as water levels start to subside from the devastating floods last week, a spokesperson from the waterways authority WSA Rhein told Quantum.
"At the moment, the Rhine is closed for shipping only between Iffezheim (km 334) and Mannheim-Rheinau (km 410,5)," said Florian Krekel.
"The stretch between Mannheim-Rheinau and the German-Dutch border is open."
The weather forecast is dry over Germany for the rest of the week, and water levels are expected to continue to fall, easing fears of greater disruption on one of Europe's key arteries for refined oil product trade.
Water levels at Maxau will drop from 8.22 metres on Monday to 7.7 metres by Thursday, according to an amalgamation of three forecast reports by brokers Riverlake.
Levels at Cologne will drop from 7.13 metres Monday to 6.4 metres by Thursday.
At Kaub, situated near many German industries, water levels are likely to average 5.51 metres Monday, well above the ‘Marke I’ warning threshold but below the ‘Marke II’ level at which all navigation is suspended, forecast data showed.
Kaub water levels are likely to fall to 5.38 metres Tuesday, 5.13 metres Wednesday and 4.83 metres Thursday.
By the end of July, water levels are likely to be well below the 4-metre mark.
The Miro refinery in Switzerland remained unreachable, Riverlake noted, which will continue to disrupt the flow of gasoline barges to ARA.
But there was little impact on gasoline barge prices in ARA, with differential prices for Eurobob in ARA trading at $4/mt above August paper Monday morning in Rotterdam.
“If anything, the Eurobob is weaker now than last week because the arbitrage to the US doesn’t look so good,” a gasoline broker said.
Eurobob differentials versus August paper dropped fast on Friday from $10/mt above August paper as the market opened, down to $4/mt above the front-month paper in the afternoon.
Distillate prices and differentials were also little impacted, sources said.
“There was very little traffic before the Rhine swelled, especially in diesel after two very low (LSGO) expiries in a row,” a diesel barge broker said.
An ultra-low sulfur diesel (ULSD) barge traded at $1.75/mt below August LSGO Friday, around recent levels and maintaining a mild contango in the nearby curve.
Quantum assessed diesel barges at $2/mt below August LSGO Friday, in view of an offer still standing after the trade, also at $1.75/mt below August LSGO.
“Freight levels were extremely low before the Rhine was closed, they couldn’t get much lower because demand has been so poor,” a barge broker said.
“So, there has not been much of an impact.”
July Low Sulfur Gasoil futures expired on July 12 with just 554 lots of open interest, or 55,400 mt of ultra-low sulfur diesel (ULSD) for delivery over the second half of the month in ARA, while the June Low Sulfur Gasoil futures expiry left just 250 lots, or 25,000 mt of ULSD for delivery.
In contrast, the May LSGO expiry was 3,320 lots, or 332,000 of ULSD for delivery in the trading hub.