Price and market trends: Shintech seeks hike for US caustic soda

08 March 2013 09:24  [Source: ICB]

Shintech on 27 February announced a $50/dst (dry short ton) increase for US caustic soda, effective immediately or as contracts allow.

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

February contract prices for liquid caustic soda in the US are assessed by ICIS at $515-585/dst (€397-450/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 was yet to respond to inquiries at the time of writing.

The buyer expressed scepticism for the stated reasons for the increase, particularly a tight market. Noting 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, Formosa, Occidental Chemical and Shintech.

By: Ken Fountain

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