Short supplies send caustic soda skywards

07 April 1994 00:00  [Source: ICB]

CAUSTIC SODA spot numbers are heading skywards both sides of the Atlantic.

In the US prices have been talked as high as $286/dry short tonne with deals at $275/tonne confirmed.

In Europe one producer claimed that anyone requiring material without contractual commitments could be paying numbers as high as $220 or even $250/tonne for prompt liquid caustic although spot numbers for July were possibly below $200/tonne.

Producers explain that with supply fixed by chlorine demand, the economic recovery, which has increased European caustic demand by 5-6% this year, has thrown the market out of balance.

The possibility of starting up chemical caustic production based on soda ash does not kick in at anything like current prices so supply looks to be tight for some time.

Agreement on H2 caustic contracts to the alumina industry appears imminent. One US producer expects the early 1994 annual $30/tonne contracts to be surpassed by H2 deals as high as $100/tonne.

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