Formosa proposes $30/dst increase for US caustic soda

27 February 2013 23:25  [Source: ICIS news]

HOUSTON (ICIS)--Formosa on Wednesday announced a $30/dst (dry short ton) (€25/dmt (dry metric tonne)) increase for US caustic soda, effective immediately or as contracts allow.

In a letter to customers, Formosa said its 100% order-control programme remains in force.

Formosa’s announcement joins those made by other producers for caustic soda.

Shintech announced a $50/dst increase for US caustic soda, also effective immediately or as contracts allow.

While the company did not cite a specific reason for the increase, a source close to the company noted that, generally, supply of caustic soda from US Gulf producers is tight and demand remains strong.

February contract prices for liquid caustic soda are assessed by ICIS at $515-585/dst.

According to one large buyer, two other chlor-alkali producers, Axiall and Olin, have also announced price increases for both chlorine and caustic soda, which are co-products of the electrolysis process.

A representative at Axiall would not confirm whether it had announced any increases. Olin has not yet responded to inquiries.

The buyer expressed scepticism for the stated reasons for the increase, particularly a tight market. Nothing that January figures from The Chlorine Institute showed an industry operating rate of 80%, the buyer said it would seem that producers might ramp up production.

The buyer said it was very unusual for producers to announce price increases for both chlorine and caustic soda simultaneously.

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

($1 = €0.77)

Follow Ken Fountain (@ICIS_Ken)  on Twitter

By: Ken Fountain

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