Price and market trends: US caustic soda producers announce price hikes

11 May 2013 09:37  [Source: ICB]

US-based petrochemical producer Occidental Chemical 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 2 May.

Dow also confirmed that it has announced a $40/dst increase, effective immediately or as contracts allow.

US caustic soda

Dow also rescinded $20 of the $50/dst increase that it announced in February, bringing the net announcement for February to $30/dst.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 was not confirmed by the company.

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

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

RATES DOWN

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, operating rates are actually flat compared to the same period a year earlier, the buyer said.

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.


By: Ken Fountain



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