Several US caustic soda producers propose hikes on tight supply

30 November 2011 23:49  [Source: ICIS news]

HOUSTON (ICIS)--A US caustic soda producer proposed on Wednesday a price increase of $40/dry short ton (dst), one among several proposed as the market contends with continuing tight supply.

Several other producers proposed increases of $80/dst ($88/dry metric tonne (dmt), €66/dmt). Another proposal was at $45/dst.

A producer said the announcements were expected because of a 13 November explosion at Tosoh's vinyl chloride monomer (VCM) plant in Japan.

The plant’s 250,000 tonne/year No 1 line and 450,000 tonne/year No 3 line have been shut down as a precaution. Thus far, Tosoh has not declared a force majeure.

Since the Tosoh plant provides at least half of Japan’s VCM exports to other Asian countries as well as Australia, sources said there are concerns that supply might be impacted well into 2012.

As a result, the general chlor-alkali supply chain in Asia, including caustic soda, is affected.

Already, Tosoh is running its 950,000 tonne/year caustic soda plant in Nanyo at 20-30% of capacity.

While the tightening of supply affects mainly Asia, it also puts pressure indirectly on European and North American consumers, the producer said.

Major US producers of caustic soda include Formosa Plastics, Dow Chemical, Olin, PPG Industries and Shintech.

October caustic soda have been assessed at $470-540/dst FOB (free on board) USG (US Gulf) by ICIS, based on input from market players.

($1 = €0.75)

For more on caustic soda visit ICIS chemical intelligence


By: Ken Fountain



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