Rhine at Record Low, Covestro and BASF Declare Force Majeure; German Q3 May Lose 1-2 Billion Euros

German chemical company Covestro declared force majeure on its polyether polyol series produced at its Dormagen site due to persistently falling Rhine water levels. The company said the Düsseldorf gauge has hit a record low, and propylene oxide, a key raw material for polyether polyol, can only be transported by ship due to technical constraints. Current water levels cannot guarantee sufficient supply, and multiple product lines face delivery delays or interruptions. Covestro relies on the Rhine for nearly 75% of its raw materials and over 30% of its finished chemical products. The Rhine carries about 80% of Germany's inland waterway freight, connecting the ports of Rotterdam and Antwerp with several major European chemical clusters, and chemicals account for 11% of its cargo volume. Persistent heat and drought have accelerated evaporation. At the Kaub gauge, water depth fell to 20 centimeters on August 5, 5 centimeters below the previous record low set in 2018. On the same day, the average flow rate measured at Lobith in the Netherlands dropped to 614 cubic meters per second, the lowest on record. Forecasts indicate water levels will fall further in the coming days. BASF had previously declared force majeure on several surfactants produced at its European plants due to raw material shortages. It is now deploying specially designed low-water vessels and increasing rail and road freight capacity. German specialty chemicals company Lanxess said barge transport has been severely constrained, with some loading and unloading points unable to operate normally, and it is shifting cargo to rail and road. Covestro said it had built up raw material inventories weeks ago, chartered shallow-draft barges, and increased sailing frequency to manage supply risks.