Europe caustic soda spot prices fall on good supply, modest demand

19 July 2013 17:29  [Source: ICIS news]

LONDON (ICIS)--European liquid caustic soda spot prices are under downward pressure because of improved supply and modest demand, market players said on Friday.

Spot prices have slipped below $400/dry metric tonne (€304/dmt) FOB (free on board) in both northwest and southern Europe, with prices largely heard in the low-to-mid $300s/dmt FOB.

This compares with NWE (northwest Europe) and MED (Mediterranean) spot ranges in the low-to -mid $400s/dmt FOB last week.

One producer considered that any price softening is likely to be temporary and linked to some recent plant restarts, following maintenance turnarounds.

The same source expected to see some trimming of chlorine output over the summer period, which it said will also directly reduce caustic soda output and therefore it suggests will help to mitigate any temporary length in the market.

As a result, it suggests that spot prices are likely to recover in August, stating that demand for caustic soda does not really seasonally slow during the summer because of its wide applications.

The same source said that current spot levels are “unsustainable” and it would make more sense to cut output rather than sell at such low levels.

Other players, however, attribute the downward pressure on spot prices to strong competition among sellers to shift volumes, ahead of the summer holidays in Europe – where demand will slow down in some cases, particularly in the Mediterranean, combined with greater availability when compared with recent months.

($1 = €0.76)

By: Heidi Finch
+44 20 8652 3214

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