A crash involving a ship carrying a cargo of scrap on Sunday left serious damage to a lock on the Moselle located in Müden, just south of Koblenz in western Germany.
The incident has caused a major blockage for ships traveling the Moselle to reach the Rhine – a vital artery for the shipment of metals such as aluminium and steel in Germany and Europe. Around 70 ships have been stuck along the Moselle on the way to the Rhine, Fastmarkets understands.
Repair works could last until March 2025, seriously disrupting the trade flows of steel and metal raw materials in Germany and across Europe, according to market participants.
Sources expect the disruption to raise freight costs for alternative transport methods and therefore prices for some raw materials, such as ferrous scrap, in the affected areas.
“In addition to the technical challenges of restoring the lock’s functionality as quickly as possible, the ships [are] stuck above Müden on the Moselle and Saar…Long periods of downtime for freight and passenger shipping represent an enormous economic burden,” the German Waterways and Shipping Authority (WSA) federal agency said on Monday.
“The WSA is therefore urgently looking for a solution to lock the ‘trapped’ ships into the Müden downstream area so that they can leave the Moselle in the direction of the Rhine and carry out other transports there,” the WSA said.
Impact on prices
The Moselle is one of the most vital transport routes for shipping in Germany and Europe. So far in 2024, around 8.1 million tonnes of goods have been transported through the Müden lock, according to the WSA.
The majority of the transported goods are ores, steel raw materials, mineral products and fuels upstream, as well as agricultural and forestry products, and downstream iron and steel products.
Although most market participants said it was too early to define how the disruption could affect metals prices, steel market sources said they believed that freight prices will likely jump for alternative routes and transport solutions, and as a result prices for raw materials might move higher.
The main alternative methods to ship scrap metal would be via truck and rail, according to market sources. But if freight must be transferred to the road, around 80 truckloads of scrap would be needed to replace one barge of the steelmaking raw material, according to a German steel trader.
A Turkish scrap trader also said that the river accident was a reason why Turkish import scrap prices rebounded late on Tuesday on new deals from Europe and the US, after hitting their lowest levels since June 2022 earlier this week.
“The accident caused the downturn in the scrap markets to stop. This was also one of the factors that prevented [Turkish scrap import] prices from falling further. I believe it will affect the scrap industry throughout Europe,” a Turkish trading source said on Wednesday.
Fastmarkets calculated the index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey at $339.45 per tonne on Wednesday, up by $14.45 per tonne day on day.
Steel industry assesses the damage
Saarlstahl/Dillinger
Saarstahl and Dillinger, German steel companies based in Saarland, are both affected by the incident, Fastmarkets heard.
“Like other companies, the Saarland steel industry is also affected by the closure. We will quantify the extent over the next few days and use alternative transport solutions such as rail and lorries. Both incoming and outgoing goods are affected. We are working with all parties involved to find a quick solution,” the spokesperson of SHS Stahl-Holding Saar, a major shareholder in Dillinger and Saarstahl, told Fastmarkets on Wednesday.
Sources familiar with the matter also said that both raw materials supply and shipping of finished steel products might be affected, especially if repair works last for an extended period.
