Europe Oct chlorine output falls 3.5%, caustic soda stocks down 2.6%

10 November 2011 17:18  [Source: ICIS news]

LONDON (ICIS)--Average European daily chlorine production in October fell by 3.5% from September 2011, while inventories of co-product caustic soda dropped by 2.6% in the same period, industry body Euro Chlor said on Thursday.

Daily production of chlorine for the region comprising the EU27, Norway and Switzerland, stood at 25,692 tonnes/day in October, down from 26,614 tonnes/day in September. Caustic soda stocks in October were at 242,103 tonnes, down from 248,558 tonnes in September.

Year-on-year figures show that chlorine production in October (796,446 tones) was 1.6% lower than in the same month last year, while capacity utilisation was 74.4%, down from 77.0% in the previous month of 2011.

Despite the decrease in caustic soda stocks over the last three months, year-on-year figures show that October stocks were 20,994 tonne above the exceptionally low October 2010 levels (221,109 tonnes).

The steady reduction in the output of feedstock chlorine since July 2011 reflects the continuous cutbacks in operating rates in the isocyanates and oxygenates markets and, especially, plummeting consumption levels in the PVC market, which is the key end use for chlorine.

The European PVC market consumes around 34% of the chlorine production, while another 30% goes to isocyanates and oxygenates production.

The reduction in chlorine production has also led to further tightness in the market of co-product caustic soda, where availability has shrank and spot prices soared to levels not seen since 2009.

The annual market trend points to further tightening as demand for PVC tends to slow in December and January, in line with a fall in activity in the downstream infrastructure and construction sectors.

Chlorine production & capacity utilisation

Month		Production (tonnes)		Capacity Utilisation (%)
	2010	2011	% change	2010	2011
January	808,563	860,558	+6.4%	74.7%	80.4%
February	786,984	808,851	+2.8%	80.5%	83.6%
March	845,597	872,912	+3.2%	78.2%	81.5%
April	834,652	832,047	-0.3%	79.7%	80.3%
May	872,472	795,252	-8.9%	80.6%	74.3%
June	843,513	860,327	+2.0%	80.6%	83.0%
July	854,731	887,702	+3.9%	79.0%	82.9%
August	873,015	831,385	-4.8%	80.7%	77.6%
September	764,415	798,408	+4.4%	73.0%	77.0%
October	809,582	796,446	-1.6%	74.8%	74.4%

Caustic soda stocks (tonnes)

	2010	2011
January	275,312	271,668
February	295,002	281,708
March	255,758	243,406
April	246,044	260,459
May	260,670	236,790
June	252,124	266,265
July	238,609	251,382
August	246,001	259,528
September	224,331	248,558
October	221,109	242,103

($1 = €0.74)

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By: Abache Abreu
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