US caustic soda contracts roll over in February

22 February 2013 22:00  [Source: ICIS news]

HOUSTON (ICIS)--Contract prices for US caustic soda are assessed at a roll over for February, as market participants said that a round of price initiatives made in late 2012 have failed to gain traction.

However, some producers have said they expect to implement at least part of the increases before the end of the first quarter of 2013.

Caustic soda is assessed by ICIS at $515-585dst (dry short ton).

A distributor said that it expected some producers to try a new set of price initiatives by the end of February, based partly on a lack of product availability following production issues at some Gulf coast facilities.

But no such move was heard during the week.

Spot and export prices are assessed lower, as a drop in caustic soda prices in Asia was said to be putting downward pressure on prices on the US west coast. East coast pricing was flat, as there was little product available, a distributor said.

A large buyer said that it expected chlor-alkali production rates to pick up in February after a sharp fall in January. That drop was largely due to outages, both planned and unplanned, the buyer noted.

Should the US home construction industry recovery begin in earnest in the spring, demand for polyvinyl chloride (PVC), one of the key end-products in the chlorovinyls chain, will grow, leading to increased production of caustic soda, the buyer said.

Major US producers of caustic soda include Axiall, Dow, Formosa, Occidental Chemical and Shintech.

($1 = €0.76)

Follow Ken Fountain (@ICIS_Ken) on Twitter.

By: Ken Fountain

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