Europe chlorine output rises 6.9% in November, caustic soda falls

09 December 2010 17:31  [Source: ICIS news]

LONDON (ICIS)--Chlorine output in Europe rose by 6.9% from October to November, while inventories of co-product caustic soda continued to fall, according to figures released by industry body Euro Chlor on Thursday.

Daily chlorine production last month totalled 27,913 tonnes, which was 3.1% higher than November 2009, when the daily output totalled 27,077 tonnes.

Chlorine output in November stood at 837,391 tonnes, which was the highest total in three months.  

Average capacity utilisation was up by 5.2 percentage points from October to reach 80.0%, which was also the highest rate for three months.

Caustic soda stocks in November totalled 217,676 tonnes, down 1.6% from October levels. This was 37,969 tonnes less than the 255,645 tonnes produced in November 2009.

The news will come as no surprise to those in the caustic soda market, who continue to describe supply as tight.

“Demand for caustic is healthy despite the year-end,” said a producer. “The pulp and paper and alumina sectors are still taking lots of product.”

The source added: “We do not anticipate that the situation will change in the beginning of 2011. PVC (polyvinyl chloride, the main end-use of chlorine) is getting weaker because of the cold weather and [chlorine] operating rates will be turned down, which will mean caustic is tight into the first quarter.”

This view had been widely echoed around the market in previous weeks, with many sources in agreement that caustic soda prices were expected to rise again in the first quarter of 2011, although the size of the price increase remained a topic for debate.

The producer said: “We saw a very strong price increase this year, much, much stronger than anticipated. While the speed of such a recovery cannot continue, we do think that the prices will stabilise at these higher levels in 2011.”

Chlorine production and capacity utilisation

(EU 25 + Norway and Switzerland)

Month	Production (tonnes)			Capacity Utilisation (%)
	2009	2010	% change	2009	2010
January	665,891	808,563	+21.4%	60.4%	74.7%
February	740,603	786,984	+6.3%	74.4%	80.5%
March	738,872	845,597	+14.4%	67.0%	78.2%
April	670,349	834,652	+24.5%	62.8%	79.7%
May	764,103	872,472	+14.2%	69.3%	80.6%
June	761,270	843,513	+10.8%	71.3%	80.6%
July	826,136	854,731	+3.5%	74.9%	79.0%
August	771,139	873,015	+13.2%	69.9%	80.7%
September	773,029	764,415	-1.1%	72.4%	73.0%
October	796,811	809,582	+1.6%	72.3%	74.8%
November	812,307	837,391	+3.1%	76.1%	80.0%

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By: Stephanie Wilson
+44 20 8652 3214

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