Attempt stalls to hike Brazil caustic soda price

26 April 2007 22:16  [Source: ICIS news]

HOUSTON (ICIS news)--A previously announced attempt to raise Brazil caustic soda prices by $40(€29)/tonne stalled, and prices are now expected to remain flat in the second quarter, a producer said on Thursday.

Brazilian producers have attempted to raise prices since the fourth quarter of 2006, when globally tight conditions led to a perception of depleted inventories in South America.

However, buyers successfully held out in the belief that US supplies of caustic soda would be sufficient to meet the local shortfall, betting on an imminent seasonal rebound in the North American polyvinyl chloride (PVC) sector.

Caustic soda is a by-product of chlorine manufacturing, and chlorine is used as feedstock for PVC, hence when PVC demand rises in the US, caustic soda production increases as well.

“Supply in the US Gulf is short and prices could edge up in late May. However, Brazilian prices will go up only if demand remains strong,” said a Brazilian producer.

South American industry sources pointed out that PVC demand was improving in the US, which would eventually result in more caustic soda availability for import and potentially stable pricing.

“In Brazil, we expect caustic soda prices to remain stable until late-September, followed by a modest decline. Average April prices for the first three weeks of the month were at $334/tonne,” said a Brazilian supplier.

Brazil caustic soda prices were assessed at $430-440/tonne ex-tank, unchanged since the fourth quarter, according to global chemical market intelligence service ICIS pricing.

Brazilian caustic soda suppliers include Dow, Solvay, Braskem and Carbocloro.

($1.00 = €0.73)

By: Luly Stephens
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly