European steel producers brace for longer shallow-water conditions

Tata Steel Nederland is reducing reliance on inland waterways, making a modal shift to rail, as it anticipates drought conditions to persist, while ArcelorMittal — which also finds low water levels on certain waterways in Europe challenging — sees potential impacts as manageable but has made isolated adjustments to production at its Duisburg plant due to shallow conditions in the Rhine, both steel producers told Platts, part of S&P Global Energy.

"The current low water levels on certain German waterways are posing challenges for the logistics sector," said a spokesperson for ArcelorMittal, adding that the company is continuously monitoring how water levels develop, being in close contact with its logistics partners and the relevant authorities.

By using additional transport routes and flexibly managing supply chains, it is possible to largely mitigate potential impacts and ensure that supplies reach ArcelorMittal's sites in Germany and their customers. However, there have already been isolated adjustments to production at the billet-, bar-, and wire-rod-specialized ArcelorMittal Duisburg steelworks due to low water levels on the Rhine, according to the spokesperson.

"At present, the impact on ArcelorMittal [operations in Germany] is manageable. Supplies to our plants and deliveries to customers can continue to be guaranteed," said the spokesperson.

Severe drought in Europe, causing extremely low water levels on the Rhine and the Danube, has also had only a limited impact on Tata Steel Nederland (TSN) so far. However, the steel producer anticipates that drought conditions, as they are expected to persist over the coming weeks, could eventually begin to affect its shipping operations, a company spokesperson told Platts.

TSN, which produced 6.7 million metric tons of steel in 2025, is situated next to the North Sea coast, but uses Europe's inland waterways for shipping.

Limited impact so far

The spokesperson explained that the drop in the river water levels has not yet had a material impact on TSN because, in anticipation of increasing drought conditions and the growing frequency of disruptions caused by extreme weather resulting in low or high water levels, the company's Outbound Logistics department has invested significant effort over the past several years in strengthening the resilience of the TSN transport network.

TSN has developed alternative routes that enabled modal shifts to rail, alongside the existing waterway network.

"For deliveries to Central and Eastern Europe we have established rail-based transport routes. As a result, we have phased out regular transport via the Danube and ceased using it as a routine shipping route till regular water levels return [to normal] and shipping over the river is once again a viable option," said the spokesperson.

Thanks to alternative arrangements, the extreme drought has had only a limited impact on TSN so far, but drought conditions, if they persist, as currently expected, could "eventually begin to affect TSN transport network operations," according to the spokesperson.

He also added that at this moment the steel plant has no water shortage yet, and there is no impact on production, but the situation with drawing fresh water, which the plant uses as a cooling agent in several processes, might change as well if the drought persists.

Times higher freight costs

BBC reported on Aug. 3 that 44% of the Rhine measuring stations and 78% of those on the Danube had recorded extremely low water levels at the end of July, citing Germany's Low Water Information System.

"Rhine and Danube levels are massively affecting our deliveries," a Germany-based service center source told Platts. "Today we have to calculate minimum four times higher freight costs. We are suffering because we have to transport alternatively via trucks," the source said, adding that no one could predict this kind of conditions half a year ago.

The low-water situation on the Rhine started to affect the supply of raw materials to Thyssenkrupp Steel's Duisburg site as early as mid-July. The company took its own push-barge fleet out of service. It now resorts to chartered shallow-draft vessels and has implemented a range of other measures to limit the impact on its production. However, its raw material supply has still become constrained, and the steel producer has eventually had to adjust its hot metal production, as it confirmed to Platts last month.

Thyssenkrupp Duisburg tends to have a stock of one to two months' worth of production, according to a German-based distributor, who added that most of the mill's imported raw materials come to Rotterdam or Antwerp first, so there should be alternative ways to deliver them to the plant.