EPCA ’13: Chlorine demand growth correlated to GDP: exec

06 October 2013 16:52  [Source: ICIS news]

BERLIN (ICIS)--Demand growth for chlorine will depend on greater GDP growth across the world, an executive with US chlor-alkali producer Olin said on Sunday.

“At the end of the day when you look at chlorine demand you can look to GDP,” said Marvin Osborne Jr, director of marketing for caustic soda, a co-product of the chlorine production.

“It’s almost a direct correlation between the two,” he said on the sidelines of the 47th annual European Petrochemical Association conference.

Chlorine is used in the production of polyvinyl chloride (PVC), a key chemical used in making pipes used in construction.

The tepid recovery in homebuilding in the US has left PVC demand as relatively flat, and chlorine production rates have been below 90% for entire year except in March. August run rates were at 85%, up from 83% in July, according to market sources.

Osborne said the only reason operating rates are that high is that the US exports a great deal of chlorine derivatives.

Europe continues to be in an economic malaise, although economists have pointed to some bright spots in recent months. Still, chlorine operating rates are down there as well, Osborne said.

China - a key user of chlorine and chlorine derivatives - has said its GDP is clocking in at more than 7%, but Osborne is hesitant to believe the number based on what he said is only 4-5% growth in energy use and chlorine production rates at 65-70%.

“We don’t believe [that GDP number is] what it is,” he said.

The EPCA conference runs 5-9 October.

By: Jeremy Pafford
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