Caustic soda

02 July 2007 00:00  [Source: ICB]

 
Uses

Caustic soda (sodium hydroxide) is a versatile alkali that has major uses in the production of chemicals, pulp and paper, alumina, soap and detergents, and cellulosics.

Other outlets include water treatment, food, textile and metal processing, mining and glass-making, among others.

Supply/demand

Demand in Europe was very good last year and remains healthy in 2007. But supply suffered in 2006 and was extremely tight, with stocks declining steadily through the year and hitting an all-time low of 215,278 tonnes in November, according to Euro Chlor figures.

Availability has improved slightly this year, with stocks up to 273,998 tonnes in May. But producers maintain supply is still tight as outages at chlor-alkali and chlorine-fed plants have reduced output in May and June. Some producers have placed customers on allocation or 100% order control.

INEOS is buying Kerling, Norsk Hydro's chlor-alkali and polyvinyl chloride (PVC) assets, with the purchase due to complete in the third quarter (Q3). Vestolit started commissioning its membrane cell plant in Marl, Germany, last month, which will raise capacity of caustic soda to 293, 000 tonnes/year.

Pricing

European suppliers are targeting a price increase of €30-50/dry metric tonne (dmt) FD NWE for Q3, which would lift contracts to €300-310/dmt. However, buyers are questioning the size of the increase, with some predicting smaller rises of €10-15/dmt or a rollover. Spot prices for liquid caustic soda in late June stood at $300-310/dmt FOB NWE. Producers say margins improved in 2006, but have dropped this year and continue to be squeezed by high energy prices.

Technology

Nearly all caustic soda is produced by the electrolysis of sodium chloride solution (brine) using mercury, diaphragm or membrane cells. For every tonne of chlorine, 1.1 tonnes of 100% caustic soda is generated.

With mercury cells, sodium from the brine forms an amalgam, which is decanted and hydrolysed to yield sodium hydroxide. Membrane cells operate with more concentrated brine and produce a more pure and concentrated caustic liquor.

The mercury cell route is being phased out in favour of membrane technology, with most European plants expected to have converted by 2015.

Health and safety

Caustic soda is available as a solid or liquid solution. Contact with organic and inorganic chemicals may cause fire or explosions. It can be absorbed by inhalation or ingestion and is very corrosive to the eyes, skin and respiratory tract.

Outlook

Europe's net supply balance will remain unchanged, despite a marginal rise in capacity from plant conversions. Demand will lag supply and sources say periods of tightness will occur more frequently.

Investment is focused in the Middle East (Iran, Saudi Arabia, Oman and Qatar) and Asia, mostly China. China continues to expand its vinyls industry, which will generate surplus caustic soda. CMAI consultancy says China will increase its exports of caustic soda to 1.4m dmt by 2011, from nearly 1m dmt in 2006.

MAjOR EUROPEAN CAUSTIC SODA CAPACITY '000 TONNES/YEAR*

Company Location Capacity
Akzo Nobel Botlek, Netherlands 700
Anwil Wloclawek, Poland 235
Arkema Fos, France 297
Jarrie, France 187
Lavera, France 375
BASF Ludwigshafen, Germany 424
Bayer Dormagen, Germany 528
Leverkusen, Germany 363
Uerdingen, Germany 264
Borsodchem Kazincbarcika, Hungary 331
ChlorAlp Pont-de-Claix, France 242
Degussa Lulsdorf, Germany 150
Dow Chemical Schkopau, Germany 275
Stade, Germany 1744
Ercros Flix, Spain 165
Vilaseca, Spain 209
INEOS Chlor Runcorn, UK 844
Wilhelmshaven, Germany 164
Kaustik Bashkortostan, Russia 290
Volgograd, Russia 220
Kerling** Rafnes, Norway 300
Khimprom Pervomaisk, Ukraine 165
Solvay Rheinberg, Germany 220
Tavaux, France 413
SolVin Antwerp, Belgium 521
Jemeppe, Belgium 194
Martorell, Spain 240
Syndial Assemini, Italy 168
Porto Marghera, Italy 220
Tessenderlo Chemie Tessenderlo, Belgium 440
Vestolit Marl, Germany 293
Vinnolit Knapsack, Germany 341

* only shows plants over 150,000 tonnes/year
** being acquired by INEOS

Source: ICIS

Profile last published 30 May 2005





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