US Dow proposes $70/dst hike for caustic soda on demand

23 August 2012 21:58  [Source: ICIS news]

HOUSTON (ICIS)--US producer Dow Chemical on Thursday proposed a $70/dst (dry short ton) (€62/dry metric tonne (dmt)) increase for caustic soda effective, immediately or as contracts allow.

The current assessed contract price for US caustic soda is $500-570/dst.

In a letter to its customers, Dow cited “continued tightened supply and strong demand” for the off-schedule selling price increase for both diaphragm and membrane grade caustic soda.

In late May, Dow was one of several US producers that announced $60/dst increases for caustic soda, after an earlier one of $50/dst announced by Dow failed to be implemented. Approximately half of the May increases have gone through, according to market sources.

A large-volume buyer of caustic soda said that it was surprised by Dow’s latest announcement.

The buyer said that the latest operating rates for US chlor-alkali producers, which showed June production at 88% of capacity, indicated that demand for polyvinyl chloride (PVC), is healthy both in the domestic and export markets.

PVC uses chlorine as a feedstock, which, in turn, is a co-derivative in the electrolysis process that makes caustic soda.

That means that both chlorine and caustic soda supplies should be decent, the source said, which would tend to disfavour a price increase.

($1 = €0.80)

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By: Ken Fountain

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