Three US producers announce price initiatives for caustic soda

02 May 2013 18:03  [Source: ICIS news]

Three US producers announce price initiatives for caustic soda(Adds Dow confirmation, paragraph 2)

HOUSTON (ICIS)--US-based petrochemical producer Occidental has announced a $40/dst (dry short ton) increase for caustic soda, joining at least two other producers in raising prices, a company source confirmed on Thursday.

Dow also confirmed that it has announced a $40/dst increase, effective immediately or as contracts allow. Dow also rescinded $20 of the $50/dst increase that it announced in February, bringing the net announcement for February to $30/dst.

Olin has made a similar announcement, according to market sources, but that has not been confirmed by the company.

Caustic soda contract prices are assessed by ICIS at $515-585/dst (€391-445/dst).

The Occidental representative said its increase is based on continued constrained supply in the US as well as steady demand.

While March chlor-alkali production rates in the US were at 91% of capacity, according to the trade group The Chlorine Institute, the Occidental source noted that for the entire first quarter of 2013, rates were down 3.5% compared with the first quarter of 2012.

Meanwhile, US exports of caustic soda have increased while imports from Europe to the US east coast are down, the Occidental source said

A large buyer of caustic soda, however, said this latest round of price initiatives is another attempt by producers to prop up the price despite weak market fundamentals.

When looking at chlor-alkali production rates since December, the operating rates are actually flat compared to the same period a year earlier, the buyer said.

While overall demand for polyvinyl chloride (PVC) - the primary end-use for chlorine - is flat, demand is rising in the US as the homebuilding sector moves into high gear.

The buyer noted that global demand for caustic soda from the alumina sector is waning, as US-based Alcoa and Russia-based Rusal have both announced a wave of production curtailments.

($1 = €0.76)

Follow Ken Fountain (@ICIS_Ken)


By: Ken Fountain



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