Thyssenkrupp says Rhine drop could hit results

Thyssenkrupp said falling water levels on the Rhine could affect its results if shipping on the river comes to a standstill, though the German steel group said customer supply is not currently at risk.

The company said Thursday it was monitoring the river and was ready to respond if levels drop further, after boat deliveries of raw materials were disrupted around its major plant in Duisburg.

Thyssenkrupp had already partially suspended its own barge deliveries of materials including coal and iron ore to the site. It said it was using private vessels with lower draughts that can operate in shallower water.

Finance chief Axel Hamann said the company had set up a dedicated task force in its steel division. He said Thyssenkrupp could adjust production and operating modes to work longer with existing inventories and was also examining transport by road and alternative routes.

Hamann said customer supply was not at risk for now, but added that if the situation deteriorated and shipping came to a standstill, an impact on results could not be ruled out.

The Rhine has fallen to record lows during hot summer weather and low rainfall. Germany's inland shipping association has warned that the river could become unnavigable in places.

Deutsche Bank economist Marc Schattenberg said navigable water depth on the river could drop to just over one metre. He said commercial shipping could soon become uneconomical because of limited transport capacity and could stop if levels keep falling.

Schattenberg also said the low-water period, which has persisted since mid-July, made estimates of a 0.1 to 0.2 percentage point burden on German gross domestic product appear increasingly plausible.

Germany has temporarily lifted a ban on truck transport on Sundays and public holidays to help industries that rely on the Rhine, including chemicals and agriculture.

Thyssenkrupp also announced higher quarterly profits and raised its annual operating profit forecast to 600 million to 900 million euros, from a previous forecast of 500 million to 900 million euros. Its shares were up almost three percent in Frankfurt.