Mexican caustic soda producers seek $80 increase

13 May 2008 22:48  [Source: ICIS news]

HOUSTON (ICIS news)--Mexican caustic soda producers have proposed a $80/DMT (dry metric tonne) price hike to be implemented 15 May amid globally tight supply conditions, sources said on Tuesday.

If fully implemented, the increase would push local caustic soda prices in Mexico into the $730-780/DMT (€467-499/DMT) ex-tank range, according to global chemical market intelligence service ICIS pricing.

Producers said the price hike is a result of higher prices of material imported from Europe to meet demand that exceeds what is produced domestically.

Declining chlor-alkali production rates in Mexico amid soft demand for co-product chlorine, as well as rising energy and freight costs, have compounded the upward price pressure, producers said.

“This increase is in line with what we’ve seen in the US market,” one producer said.

Chlorine and caustic soda are produced simultaneously in the same manufacturing process, but chlorine demand has a greater influence on production rates because it is a corrosive, toxic gas that is dangerous to store.

Caustic soda producers in Mexico include Mexichem and Iquisa.

($1 = €0.65)

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By: Greg Holt
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