AFPM `13: US caustic soda proposed hikes see mixed reaction

24 March 2013 14:02  [Source: ICIS news]

HOUSTON (ICIS)--Participants in the market for US caustic soda anticipate some spirited discussions over the latest round of price initiatives, sources said in advance of the American Fuel & Petrochemical Manufacturers (AFPM) conference in San Antonio, Texas.

An earlier round of price initiatives, made in the waning weeks of 2012, failed to gain much traction among buyers, although March contracts are still under discussion.

In recent weeks, several major producers made price initiatives ranging from $30-50/dry short ton (dst) (€25-42/dry metric tonne (dmt)), which would take effect on 1 March. Producers cited continuing tightness in supply, caused by planned and unplanned outages in late 2012 and early 2013, and healthy demand across most consumer segments for the proposed price hikes.

Market participants had been waiting on the latest chlor-alkali production figures for an indication of whether and how much production had rebounded after a sharp slump in January.

The February figures showed a slight uptick in production, which did not offset the previous drop.

A producer said that the slight upturn did not necessarily indicate that production was returning to the very robust level seen in December. Inventories remain snug and demand is still healthy, the producer said.

But some buyers, particularly large ones, have said their demand is soft because their own production is dampened. And they have argued that a rebounding US home construction sector, reinforced by recent home starts and building permits statistics, calls for increased chlorine production, which would mean more caustic soda availability.

The AFPM's International Petrochemical Conference (IPC) begins on Sunday and lasts through Tuesday.

($1= €0.77)

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By: Ken Fountain

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