February US chlor-alkali rates match January

31 March 2010 19:01  [Source: ICIS news]

HOUSTON (ICIS news)--February chlor-alkali production rates were 84% of capacity, a near match to January’s 85% level, a trade group said on Wednesday.

February’s output of chlorine was 865,396 tons (785,082 tonnes), while caustic soda production was 911,176 tons for the month, The Chlorine Institute said.

This production compared with 960,256 tons of chlorine and 1,000,091 tons of caustic soda over the slightly longer January.

Chlor-alkali producers earlier said the February rates would likely be close to the January numbers.

The reason for this was to ramp up chlorine inventories for polyvinyl chloride (PVC) production ahead of the seasonal demand increase in the home improvement and construction sectors beginning late March.

Buyers in the US caustic soda and PVC segments were closely watching the February statistics to try to gauge developing supply/demand going into the second quarter.

US caustic soda buyers said higher chlor-alkali production rates could weaken suppliers’ $80/dmt (dry metric ton, €60/tonne) price drive, begun mid-February, by skewing currently balanced fundamentals toward supply.

US and Latin American PVC buyers said higher US chlor-alkali rates pushing increased resin production might fall upon weaker than expected domestic demand and softening export opportunities.

Each of the US PVC producers have an unsettled 5 cent/lb March price hike under negotiation, while two producers also announced 5 cents/lb would be sought in April, but others did not follow.

US PVC pipe-grade contract prices were assessed in a 73-75 cent/lb range by global chemical market intelligence service ICIS pricing following implementation of 5 cent/lb increases in January and February. General purpose PVC contracts ranged 77-79 cents/lb at the same time, according to ICIS pricing.

March US domestic caustic soda contracts were assessed at $200-250/dst (dry short ton) by ICIS, with exports ranging $185-210/dmt FOB (free on board) US Gulf, pressured up on rising price sentiment.

US PVC producers include Formosa Plastics, Georgia Gulf, Occidental Chemical, Shintech and others. US PVC buyers include most municipal pipe and construction materials companies.

US caustic soda producers include Formosa Plastics, Georgia Gulf, Olin, PPG and Dow, among others.

Caustic soda buyers include alumina and paper industry market participants, among other industries such as soap and acid production.

($1 = €0.75)

For more on caustic soda and chlorine visit ICIS chemical intelligence
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By: Judith Taylor
+1 713 525 2653

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