Global growth of 4% to drive caustic soda demand -Tricon

07 April 2011 20:26  [Source: ICIS news]

MUMBAI (ICIS)--Global growth in key consumption sectors for caustic soda, at an average of 4% from 2010-2015, is likely to fuel demand, an industry official from Tricon Energy said on Thursday.

“Global net export of caustic soda in 2010 was 4.5 million dry metric tonne (dmt), driven by the alumina and pulp sectors," said Shi Weimin, Tricon Energy's director for Asia Pacific during a speech at the Vinyl India conference in Mumbai.

Consumption in the alumina sector accounts for 60% of the net export, followed by 25% for pulp and 15% for others, he added.

Global caustic demand in 2010 was 61.1m dmt, and the figure is set to rise this year, in line with the growth in the core-user segments, he said.   

The main uses of caustic soda are in the manufacture of alumina, pulp and paper, soap and detergents and petroleum products as well as organic and inorganic chemical production.

“Demand in northeast Asia is expected to increase by 5.1% to 26m dmt this year,” he said.

Caustic soda production in northeast Asia also is slated to get a boost of 5.7% to 29.4m dmt in 2011. The surplus in production will ensure that northeast Asia will continue to be a key exporting region, he added.

China is the largest caustic soda producer globally, with a capacity of 30m dmt out of 80m dmt global capacity,” he said.

Rising crude oil, energy prices and transportation costs, coupled with tight supply and healthy demand, are likely to maintain caustic soda prices at the current level, according to Shi.

However, the additional capacity of 2m dmt in the last quarter of 2010 and the first quarter of 2011 in China might put a pressure on prices in Asia, he said.

Prices of caustic soda were last assessed by ICIS at $400-420/dmt (€280-294/dmt) FOB (free on board) NE (northeast) Asia on 1 April.

The two-day Vinyls India conference ends on 8 April.

By: Feliana Widjaja

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