26 July 2012 18:09 [Source: ICIS news]
HOUSTON (ICIS)--The outlook for caustic soda is benefitting from demand in the water-treatment and pulp-and-paper industries, the chief executive of US-based Dow Chemical said on Thursday.
While there is some risk to aluminium margins, the alumina industry in Australia is actually buying caustic soda from the US Gulf coast, Liveris said. "We are going to see, I believe, an extended caustic cycle for a while."
Caustic soda is produced as a by-product of chlorine production.
However, production rates are determine by chlorine demand.
As a result, chlor-alkali producers could reduce overall production if chlorine demand is weak – even if demand for caustic soda is strong.
Currently, chlorine demand is weak because of sluggish demand from the construction market for its major derivative, polyvinyl chloride (PVC).
Dow uses much of its chlorine in its specialty business, Liveris said.
The company's commodity epoxy-resins business also uses chlorine as a feedstock, and its performance has been dragged down by declines in the wind-turbine and industrial-coatings markets, he said.
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