US May chlor-alaki operating rate drops sharply to 74%

15 June 2012 16:21  [Source: ICIS news]

HOUSTON (ICIS)--US chlor-alkali production was 74% in May, down from 86% in April, a US trade group said on Friday.

US chlor-alkali production in May was 858,421 tons (946,232.26 tonnes) of chlorine and 899,961 tons (992,020.5 tonnes) of caustic soda, according to The Chlorine Institute.

May’s figures were a dramatic downturn from the first part of the year, as operating rates consistently have been in the mid-80s range since January.

But the decrease was not unexpected, according to one market participant.

“It’s not a surprise,” the producer said, as the figures reflect growing concerns that the market for chlorine derivatives such as polyvinyl chloride (PVC), used extensively in home construction, is not seeing its typical spring rebound.

The producer said the downtick in production likely would lend support to price increases for caustic soda and hydrochloric acid (HCl) on tight supplies. Demand for HCl from the domestic oil and gas production sector, where it is used in hydraulic fracturing, has been growing, the producer said.

Major US chlor-alkali producers include Formosa Plastics USA, Georgia Gulf, Shintech, Occidental Chemical (OxyChem) and Westlake.

($1 = €0.79)

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By: Ken Fountain

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