US caustic soda producer announces price hikes on tight supply

27 June 2011 21:15  [Source: ICIS news]

HOUSTON (ICIS)--A major US caustic soda producer announced price increases on Monday, citing tight supply and strong demand, the company said.

A $25/dry short ton (dst) (€20/dry metric tonne (dmt)) increase was announced for diaphragm-grade material and $35/dst was announced for membrane, according to a letter sent to customers. The announcement said the increase was affective immediately, or as contracts allowed.

May contracts were at $440–480/dst FOB (free on board), as assessed by ICIS.

Meanwhile, the company cited continued tightened supply in the US Gulf and strong domestic demand as the reasons why it was keeping its order control programme on 100% allocation in effect. Monday’s announcement is the fourth price hike sought by the producer in 2011.

A $40/dst increase was implemented during the first quarter of the year. Then a second round of increases between $50­–60/dst was announced.

Market participants said about half of the second increase was reflected in May contracts and the remainder would likely be pushed through in June contracts.

A third increase of $50/dst is also under discussion by market players.

A major caustic soda buyer cast doubt on the latest price increase announcement, citing the pending resistance on the third round of price increases and an expected lengthening of supply by the fourth quarter.

However, a producer was confident that about half of the $50/dst increase would succeed by 1 July, with the remainder implemented throughout the month.  

Major US caustic soda producers include Dow Chemical, Formosa Plastics USA, Georgia Gulf, Olin, Occidental Chemical, PPG Industries and Shintech.

($1 = €0.71)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
For more on caustic soda visit ICIS chemical intelligence

By: Ruth Liao
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