US caustic producers push through $50 price hike

06 March 2008 23:34  [Source: ICIS news]

HOUSTON (ICIS news)--US caustic soda producers successfully pushed through a 10% price hike for February contracts this week, market sources said on Thursday.

The first $50 of what most producers later increased to an $80/DST (dry short ton) (€57/tonne) price hike nomination for February contracts was implemented this week with little resistance from buyers, participants said.

Success of the first $50 increase was widely expected in the market amid critically tight global supply conditions and fast-rising spot prices.

The hike pushed US caustic soda contract prices into the $520-570/DST FOB (free on board) range, according to global chemical market intelligence service ICIS pricing.

While producers said they would seek to raise prices by an additional $30/DST before month’s end, buyers said they would staunchly resist the second part of the hike because it was a result of an exaggerated caustic soda supply forecast.

Although most US caustic soda producers later increased their initial nomination, producers Formosa and Georgia Gulf proposed an $80/DST price hike when the rest of the market aimed lower. Both producers also said they would not accept a compromised contract settlement even at the risk of losing market share.

US caustic soda producers include Dow Chemical, Occidental Chemical, Olin, PPG Industries, Georgia Gulf and Formosa.

($1= €0.65)

For more on caustic soda visit ICIS chemical intelligence

By: Greg Holt
+1 713 525 2653

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