US caustic soda prices pressured up amid tight supply

08 October 2010 20:00  [Source: ICIS news]

HOUSTON (ICIS)--US caustic soda prices continue to be pressured higher amid supply issues, traders and suppliers said on Friday.

“The caustic soda market is extremely firm,” a small volume trader said this week.

Suppliers and traders described supply as very tight, with several traders commenting that inventories in both the US Gulf and Europe were low.

In the US Gulf, short supply conditions were partially underpinned by several turnarounds scheduled for late September-to-October, sources said.

However, demand was also a factor.  

“Domestic demand is good and alumina buyers are active,” one supplier said.

Large buyers described conditions in the US Gulf as snug but workable for November requirements, with loads up to 5,000 dry metric ton (dmt) said secured.  

Traders said membrane-grade – high purity/low salt – caustic soda was not available until November or December, with price expectations for upcoming requirements ranging upwards of $375/dmt (€270/dmt).

Caustic soda export prices were assessed by ICIS at $335-365/dmt, with input on the range mostly targeting diaphragm-grade, which has a higher salt content than membrane-grade material.

Producers issued price increase initiatives in September and October at $40/dmt and $45/dmt, respectively, for spot and domestic contracts. 

Following those announcements, most suppliers also initiated a $50/dmt price-hike proposal on spot and export caustic soda, effective immediately for October business.  

US caustic soda producers include Formosa Plastics, Georgia Gulf, Shintech and Dow Chemical.

($1 = €0.72)

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By: Judith Taylor
+1 713 525 2653

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