Europe caustic soda stocks down 7.6% in July

14 August 2008 17:29  [Source: ICIS news]

LONDON (ICIS news)--European caustic soda stocks increased 7.6% to 267,042 tonnes in July from 248,261 tonnes in June, according to figures released by industry association Eurochlor on Thursday.

 

Market players suggested the possible downturn in demand was due to the usual summer vacation season and said that strong demand would resume in September.

 

Although extra volumes were available, exports were 17,889 tonnes lower than the previous month, said one producer source.

 

July chlorine production of 914,534 tonnes was a 6.6% increase on last month’s rates of 857,716 tonnes and only 0.4% lower than July 2007’s figures of 917,756 tonnes.

 

In contrast to the previously booming caustic soda market, this suggested a possible increase in demand from the downstream polyvinyl chloride (PVC) market.

 

Market sources reported healthy PVC demand in eastern Europe, Latin America, Russia and the Middle East due to the region's booming construction industries, countering the downturn experienced in the northwest European market.

 

The news of increased chlorine stocks did not come as a surprise to market players, who reiterated the recent tightness of the European caustic soda market.

 

The European caustic soda market “could not continue forever in that direction”, said one manufacturer who added an increase in chlorine production was necessary.

 

The increased production, it stated, was made more workable following price hikes of approximately €100/tonne ($149/tonne) across the downstream European PVC market.

 

The increasing stock levels would firm the resolve of buyers now looking to turn the spiralling caustic soda and PVC prices into rollovers and decreases, with one consumer source stating that the prices had spiked and were now on the decline.

  

EU 25 + Norway/Switzerland

Production and capacity utilisation

Month	Production (tonnes)			Capacity Utilisation (%)
	2007	2008	% change	2007	2008 (estimate)
January	923,012	920,462	-0.3	87.5	86.1
February	845,299	854,607	+1.1	88.8	85.4
March	906,139	916,394	+1.1	85.9	85.7
April	889,595	874,506	-1.7	87.2	84.5
May	856,970	911,528	+6.4	81.3	85.2
June	837,177	857,716	+2.5	82.0	82.9
July	917,756	914,534	-0.4	85.4	85.0

 Caustic soda stocks (tonnes)

	2007	2008
January	299,541	274,625
February	297,068	249,762
March	302,498	277,515
April	321,209	260,049
May	274,664	257,559
June	261,890	248,261
July	248,303	267,042

 ($1= €0.67)

By: Stephanie Wilson
+44 20 8652 3214

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