NPRA ‘11: Producer and consumer disagree over caustic soda supply

28 March 2011 21:23  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--A caustic soda producer and consumer presented contrasting outlooks over caustic soda supply through 2011 in interviews on the sidelines of the International Petrochemical Conference (IPC) on Monday.

The producer said the crisis in Japan will tighten caustic soda supply for about one year while production facilities and infrastructure in Japan are repaired, and the effects would be evident in firm pricing.

However, a major global caustic soda buyer expected stable if not softer prices toward the end of the year in line with the trend projected prior to Japan’s earthquake. The caustic consumer said that any current price increases would be short term.

Caustic soda prices were rising in Latin America and globally as a result of the disaster in Japan, the major North American producer said on Monday.

Price increases of $60/dry metric tonne (dmt, €43/dmt) effective immediately were heard from most US caustic soda producers, driven by tight supply and ongoing healthy demand, according to the source. One caustic soda maker said it was raising prices by $50/dmt, but the amount could be revised upward in the near future.

Caustic soda inventories in the US were gauged as tight, the producer said.

Caustic soda in Europe was very tight in the fourth quarter of 2010 and shipments to the US east coast were significantly reduced. The situation in Europe improved in the first quarter of 2011, but the earthquake and tsunami in Japan reversed the trend, the source said.

On the other hand, the caustic buyer said it increased inventory holdings with additional purchases from caustic soda producers, not because it was short on caustic or concerned over higher prices, but to cover for market uncertainties.

The consumer said April caustic soda commitments have been secured, amid some uncertainty for May. From May to year-end, no disruptions were expected aside from shipment delays of two to three weeks, according to the buyer.

The source said it had negotiated lower caustic soda prices for the second quarter of 2011 than for the first.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

($1 = €0.71)

For more about caustic soda visit ICIS chemical intelligence
Click here for the latest news about the Japan disaster.


By: Ron Coifman
+1 713 525 2653

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