Live Markets: Rhine levels fall, growth risks rise

BASF SE

04/08/2026 13:12

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RHINE LEVELS FALL, GROWTH RISKS RISE
Water levels on the Rhine, a core artery for German manufacturing and energy transportation, are causing another headache. 
      On Tuesday, the water level at the Kaub chokepoint, a shallow section of the river, hit its lowest since records began in 1880. 
Roughly 285 million tons of freight move along the river annually, according to ING, carrying about 80% of all goods transported on Germany's inland waterways. 
"As the Rhine is home to crucial industries, the economic impact of supply chain constraints, and a potential reduction in production is much larger than the Rhine's c.6% share of total German freight volume would suggest," notes ING's global head of macro Carsten Brzeski.
During the 2018 drought, a full month of low water reduced inland shipping volumes by about a quarter, Brzeski adds, noting that it was estimated to have shaved about 0.3 percentage points off GDP growth. 
"The risk is high that this time around, the economic impact will be larger," Brzeski adds, noting that low water levels during the start of August are "unprecedented" as they usually occur between September and November. 
"Unless the German government finds a reliable rainmaker, we should prepare to see a repetition of 2018 with a negative impact of at least 0.3 percentage points of GDP growth," he adds. 
Companies have so far managed it well, with measures to mitigate the impact bearing fruit. 
     Here's Bayer BAYGn.DE from today's earnings call (via AlphaSense): "I think we've managed to mitigate it thus far," said Bill Anderson, CEO of Bayer. "So far there's not been an impact."
And from BASF's BASFn.DE call last week (via AlphaSense): "We are much better prepared than we were, for example, in 2018, where we had a big impact of low Rhine water levels over an extended period of time," said BASF chairman Markus Kamieth. 
"By deploying specialised ships that can still carry goods – feedstocks and products – through the Rhine at very, very low water levels, and also due to various other contingency measures of shifting the mode of transport, we are in a very, very good shape right now," he added.
(Samuel Indyk)
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