APLA ’08: US caustic soda set for decline - trader

17 November 2008 15:24  [Source: ICIS news]

RIO DE JANEIRO (ICIS news)--Demand for caustic soda has weakened due to the global economic downturn, and prices for US material could decline precipitously in the coming weeks, a trader said on Monday.

Pulp and paper plants in Brazil that consume large amounts of caustic soda have cut back production after pulp lost about one-third of its value since the start of the fourth quarter, the trader said on the sidelines of the 28th Latin American Petrochemical Annual Meeting (APLA).

Some plants are only operating three weeks per month, said the trader.

With alumina production also currently being reduced in the Americas, the trader said caustic soda supply conditions have loosened enough that prices now have room to decline in the coming weeks.

“It’s going to be a bloodbath in December,” the trader said.

The November US contract price-hike nomination of $110-120/dst (dry short ton) is also unlikely to be successfully implemented, the trader said.

However, the trader said, it may prevent contract prices from declining for the month.

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By: Greg Holt
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