US caustic soda June contract prices rise on tightness

06 July 2012 23:04  [Source: ICIS news]

HOUSTON (ICIS)--June contract prices for US caustic rose by $20/dst (dry short ton) ($18/tonne, €15/tonne) as price initiatives announced earlier by producers have begun to take hold, market sources said on Friday.

Contract prices are assessed at $490-560/dst. Spot and export prices are also assessed higher on a notional basis.

Four major producers announced in late May $60/dst increases for caustic soda, effective immediately or as contracts allow (typically 30 days).

Another producer rescinded an April initiative of $50/dst for May contracts, which was not implemented, and announced a new one of $60/dst.

hile buyers were successful in resisting earlier increase announcements, it was widely believed that producers had enough momentum that the latest round would be implemented, at least partially, in June.

The most recent chlor-alkali production rates released by the Chlorine Institute showed a sharp drop-off in production in May, largely because of both planned and unplanned outages, creating some tightness in the market for caustic soda.

Meanwhile, demand for polyvinyl chloride (PVC), the primary end-product for chlorine, continues to be flat, according to market sources.

Producers have said that export demand for caustic soda remains healthy across all consuming sections, particularly in Latin America, Asia and Australia.

Major US producers of caustic soda include Dow Chemical, Georgia Gulf, Formosa, Occidental Chemical (OxyChem), Shintech, and Brenntag.

($1 = €0.81)

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By: Ken Fountain

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