31 December 2007 07:15 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian caustic soda prices are expected to remain firm in 2008 on strong demand from India, the US and Canada amid snug supply, major market players said on Monday.
"A supply gap caused by the closure of Dow Chemical’s facility in
The Dow plant in
With the yearly import demand of 400,000 dry tonnes, the US and Canadian west coast will need more than 700,000 dry tonnes of material from Asia, Mitsubishi Corp, Asia’s largest caustic soda trader with 1.5m dry tonnes annual trade volume, said.
Asian liquid caustic soda prices has risen this year amid snug supply, largely hovering around $270-300/dry tonne FOB (free on board) northeast Asia (
The only exception was a few weeks during and after the Chinese New Year when prices were at $255-265/dry tonne caused by mounting inventory in
Despite the general bullishness, some voiced uncertainty on the supply side.
“Two factors may depress chlor-alkali margins. One is strong chlorine values which will push up operating rates of chlor-alkali units and increase caustic soda output. The second factor was the uncertainty of
But not all feel the pinch from
“New capacities in
On 1 July,
Market sources noted with that the government measure in place,
Initial caustic soda contract negotiations between Asian producers and Australian alumina buyers for the first half of next year pointing to a $35-65/dry tonne increase than the current level indicate the strong uptrend of caustic soda prices for the next year.
Offers from Asian producers for the first half of next year to Australian contract customers are hovering around $310-340/dry tonne, compared with $275/dry tonne for the second half of this year.
Producers cited rising raw material costs such as salt and coal, for which a large number of contracts will expire by the year end, and new contracts for next year will be seeing 10-20% price increases.
With only one major capacity expansion of 150,000 dry tonnes/year at Tosoh’s
A gloomy economic outlook for the next year from some major markets could cap production of polyvinyl chloride (PVC) and chlorine derivatives, and in turn, further jack up caustic soda prices.
The weak US dollar and rising inflation will also spurred the upward price trend for caustic soda, they added.
($1 = €0.68)
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