04 March 2013 15:30 [Source: ICIS news]
HOUSTON (ICIS)--Market sources in the US chlor-alkali industry expressed mixed reactions on Friday to a new round of price announcements by producers of chlorine and caustic soda.
Contract prices for US caustic soda rolled over in February after a set of price initiatives failed to be implemented.
Occidental Chemical (OxyChem) has announced a $50/dst (dry short ton, €39/dst) increase for liquid caustic soda, effective immediately or as contracts allow.
Dow Chemical and Shintech also announced increases of $50/dst for liquid caustic soda.
Olin, meanwhile, announced an increase of $60/dst for chlorine and a $50/dst increase for caustic soda.
Axiall announced an increase of $60/dst for chlorine and $30/dst for caustic soda.
Formosa was the last producer to make an announcement, at $30/dst, for caustic soda.
Some sources said that after the lower, $30/dst price initiatives for caustic soda were announced, other producers had "backed off" somewhat on the higher increases.
Some producers cited continuing tightness in supply, caused by a set of planned and unplanned outages and a drop in operating rates in January after a robust December. Demand, meanwhile, remains strong across most consumer segments, producers said.
Reactions to the announcements from market participants were somewhat mixed.
One distributor said there is momentum for an increase in caustic soda. However, the fact that two producers did not announce an increase for chlorine – including OxyChem, a leader in the merchant market – is somewhat interesting, the distributor said.
A large buyer said it was “very unusual” for producers to make simultaneous announcements for chlorine and caustic soda, which are co-products of the electrolysis process. The buyer added that its demand is not particularly strong.
A distributor, by contrast, said that while the simultaneous announcements might not be usual, they are not particularly surprising. With chlorine demand expected to increase in the next couple of months because of increase home construction activity, and with caustic supply still snug, it would make sense to raise prices on both products.
Liquid austic soda contracts for February are assessed by ICIS at $515-585/dst. Chlorine contract prices for the fourth quarter of 2014 are assessed at $275-310/short ton.
($1 = €0.77)
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