AC '02: Current peak in US chlorine prices to be temporary

27 June 2002 04:25  [Source: ICIS news]

SINGAPORE (CNI)--An exceptional rise in US chlorine prices in the past two months has been partly caused by a surge in demand for polyvinyl chloride (PVC) in Asia, according to Charles Fryer, managing director of Tecnon OrbiChem UK.

However, Fryer told delegates to the 7th Aasian Chloralkali Conference in Singapore that the Asian demand increase was likely to be ephemeral since it was based on the rebuilding of inventory rather than true demand.

In addition, prices had been forced up to their current peak by a temporary shortage of capacity due to temporary bottlenecks in chlor-alkali production. Fryer said a combination of these two factors meant chlorine prices were likely to start tumbling again within a matter of weeks.

Fryer said by January 2003 chlorine prices would be starting their next true downward cycle while caustic soda prices could be in the throes of their next upward sweep.

He said the chlor-alkali industry was usually at its most profitable when caustic soda was short, not when chlorine was short.

Fryer said cycles in the chlorine:caustic balance were getting shorter and, based on recent experience, now appeared to be down to 30-33 months for a full boom-bust-boom cycle.

By: James Dallmeyer
+65 6780 4359

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