05 July 2012 22:52 [Source: ICIS news]
HOUSTON (ICIS)--Caustic soda solution prices are facing upward price pressure in Latin America because of reduced chlor-alkali production rates in the US, industry sources said on Thursday.
Weak demand for polyvinyl chloride (PVC) has resulted in declining production of its feedstock chlorine, and in turn, supply of chlorine co-product caustic soda has tightened.
Market participants said a $35/dry metric tonne (dmt) hike was announced in Mexico’s domestic market effective 1 July, and discussions with buyers are ongoing.
On the Pacific coast of South America, participants also noted upward price pressure amid increasing consumer inquiries for product.
Colombia buyers were heard asking for caustic soda solution from non-traditional suppliers, as the usual caustic sellers did not have sufficient material available.
Another indication of tightening supply was the increasing frequency of calls from buyers inquiring for caustic soda flakes in Central American and northern South American countries, sources said.
Caustic soda prices in Latin America are assessed at $450-490/dmt (€360-392/dmt) CFR (cost & freight) Mexico/Colombia.
($1 = €0.80)
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