15 May 2008 16:19 [Source: ICIS news]
LONDON (ICIS news)--European April caustic soda inventory levels were reported to have fallen by approximately 17,000 tonnes, or 6%, on March levels, a producer said on Thursday, indicating ongoing difficulties faced by the market.
If confirmed, the numbers showed inventories remained below what most sources considered a comfortable level - 300,000 tonnes.
Although there have been no official figures released by the industry association, Eurochlor, a producer reported April stock figures at around 260,000 tonnes while March was at 277,000 tonnes.
Capacity utilization at European plants was reported at 84-85% for both April and March, “more or less in line with February”, said the source.
“The drop is mainly due to the continuous high demand across all applications,” said the source, “as well as the extended export opportunities open to European sellers”.
Tight inventories will add further weight to producers pressing for higher numbers on the spot market, along with news that US producers were proposing a further $60-65/dry metric tonne (DMT) (€39-42/DMT) hike from 1 July.
European spot prices were last assessed at $440-450/ (DMT) on a free on board (FOB) NWE (northwest ?xml:namespace>
Selling ideas have been mooted much higher, up to $480-490/DMT FOB NWE, for export to the US Gulf.
This was not high enough, however, for one source.
“For any new business, $480-490 would be the very low end, but this is only a guess at the moment,” the source added.
of the increasing numbers.
Numbers in the
According to sources in Latin America, a parcel of 9,000 DMT arrived in
The source reported delays in obtaining customs clearance due to a strike at the port, although he added that this could be resolved by the end of the week.
European second-quarter contract talks resulted in hikes of €30-40/tonne on tightening supply and strong demand, buyers and sellers confirmed in April. Based on these numbers, the seller said it was now looking ahead to the third quarter and suggested it could see yet another round of price increases.
Buyers have so far not commented on speculation over future contract prices.
“We cannot point to a serious number yet, but time is being taken to figure this out, and it will be announced just as soon as the market allows,” said one seller.
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