06 May 2011 22:01 [Source: ICIS news]
HOUSTON (ICIS)--The US Gulf caustic soda market is bracing for record high water levels on the lower Mississippi river in the next few weeks as ongoing flooding in the US midwest makes its way south, sources said on Friday.
The US Coast Guard on Friday closed part of the river at Caruthersville, Missouri, because of the risk that the wakes from vessels could force water over the riverfront floodwall there.
One market source estimated flood levels would reach the lower Mississippi river by the middle of next week.
In addition, the stranded barges already on the river that were unable to offload were likely to incur additional charges, the source said.
A caustic soda producer said high river levels were expected to disrupt barge traffic by the third week of May, which would halt barge loading and offloading.
As a result, more caustic-soda railcars were being loaded in order to distribute to US midwest customers.
US Gulf caustic soda producers include Shintech, Formosa, Dow Chemical, PPG Industries and Occidental Chemical (OxyChem).
A spokesman for Kirby – the largest US barge operator – said he expected other sections of the river to close as the crest of the flooding moves downstream. Kirby operates a third of its 829-barge fleet on the Mississippi and its tributaries.
“The worst part of it is it is still raining up there” on parts of the upper Mississippi river and its tributaries, the spokesman said.
Kirby expects the flooding to have a 2–7 cent/share impact on its quarterly earnings, the spokesman said. Shares of Kirby were trading at $54.43 (€37.57) on Friday on the New York Stock Exchange.
President Barack Obama on Wednesday declared parts of Kentucky, Mississippi and Tennessee as disaster areas because of the flooding.
Police officers in Memphis, Tennessee, urged residents of nearly 1,000 homes near the Mississippi river to evacuate, according to news accounts.
Rising waters have broken records set in 1927 and 1937, according to news reports.
The Mississippi river was predicted to crest at 64.5 feet (19.7 metres), 16.5 feet above flood levels, on 17 May at Vicksburg, Mississippi, according to news accounts.($1 = €0.69)
(Additional reporting by Brian Ford)
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