US chlor-alkali operating rate jumps in June

18 July 2012 23:36  [Source: ICIS news]

HOUSTON (ICIS--US chlor-alkali production in June jumped from May by 10 percentage points to 84% of capacity, a trade group said on Wednesday.

US chlor-alkali production in June was 933,660 tons of chlorine (847,016 tonnes) of chlorine and 971,100 tons (880,982 tonnes) of caustic soda, according to The Chlorine Institute.

The trade group reported May operating production at 74% of capacity, or 858,421 tons (778,754 tonnes) of chlorine and 899,961 tons (816,439 tonnes).

The June numbers marked a sharp uptick back to the mid-80s range after the previous month’s drop. Before May, operating rates had been in that range since January.

One market participant said the increase in operating rates was somewhat surprising because demand for chlorine derivatives remained dampened, but might reflect some seasonality.

But producers might be operating harder if a recent increase in the price of caustic soda, a by-product of the electrolysis process, can offset the loss of margins on polyvinyl chloride (PVC) and other derivatives, the source said.

However, the US Federal Reserve’s Beige Book summary of economic conditions for July indicated that PVC demand in at least one region was on the upswing.

The Federal Reserve district that includes much of the Texas Gulf coast area reported that demand for PVC, tied to residential construction, strengthened, and exports continued to be a major source of sales.

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

($1 = €0.81)

Additional reporting by Brian Ford

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By: Ken Fountain

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