Updated to mid-November 2009
Asian market review by Hunwei Ng, ICIS pricing
The Asian caustic soda market saw mixed fortunes in the quarter ending mid-November, rising 48% to $200-230/dmt (dry metric tonne) FOB (free on board) NE Asia (northeast Asia) in mid-September before declining 7% to $190-210/dmt FOB NE Asia.
Resurgent demand from the aluminium and paper industries helped to propel the price rebound. Rising inventory levels and flattening demand reversed the price trend.
European market review by Stephanie Wilson, ICIS pricing
The European caustic soda market was showing signs of recovery in the period mid-August to mid-November, with spot prices climbing $120-140/dmt on the back of limited availability due to reduced chlor-alkali rates and several production issues.
Spot prices climbed from record lows of $50-80/dmt FOB in both northwest Europe (NWE) and the Mediterranean (MED) to $185-200/dmt FOB NWE and $200-220/dmt MED at the highest point in October.
Producers were also able to achieve their targets of €50-80/dmt in the contract market, where prices climbed from €220-280/dmt FD (free delivered) to €250-300/dmt FD.
However, the resolution of production issues coupled with some import pressure on diaphragm grade in the Mediterranean, improved supply in the area, while the fast approaching year-end made consumers hesitant to purchase once again. This pressure was immediately registered in the sensitive Mediterranean spot market, where prices slipped $10-20/dmt.
Looking ahead, the downward pressure was expected to continue in the run up to the year-end.
US market review by Judith Taylor, ICIS pricing
US caustic soda export prices rose strongly between August and November, boosted by implementation of suppliers’ increases of $60/dmt and tight supply due to low chlor-alkali production rates.
From an August low of $30-60/dmt, caustic prices rose to a late October spread of $140-170/dmt, pushing up domestic barge prices along with the export rise.
Chlor-alkali production rates were 79% in July, according to The Chlorine Institute, rising to 85% in August before settling back to 80% in September.
An outage at one plant hampered production of membrane-grade, but it was the buying frenzy in August that sucked material out of the Gulf until October.
Caustic soda contracts were fiercely competitive between August and October, with no final settlement yet accorded for the fourth-quarter. September’s contract range was assessed at $150-200/dst (dry short ton), up $25 from the previous range.
Latin American market review by Judith Taylor, ICIS pricing
Between July and August, Brazil’s domestic ex-tank caustic soda prices rose about $100/dmt due to an overall upward trend in the Latin American chlor-alkali market.
By October, Brazil’s ex-tank range was assessed at $250-350/dmt, with the rise attributed to short supply of caustic matched to good demand.
Argentina’s ex-tank range was steady between August and October, along with Mexico, maintaining respective assessments of $250-300/dmt and $500-600/dmt.
The import market was different due to fluctuations in US Gulf (USG) FOB price trends, with Brazil’s import spread up about $120/dmt between August and November, and Colombia’s hitting $220-270/dmt CFR (cost and freight) by end-October. Mexico’s import spread was $150-200/dmt CFR in August and $180-220/dmt CFR in October.
Tight membrane-grade caustic soda and higher prices in the US boosted Latin American imports.
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Caustic Soda
Uses and Outlook
Caustic soda (sodium hydroxide) is a versatile alkali. Its main uses are in the manufacture of pulp and paper, alumina, soap and detergents, petroleum products and chemical production. Other applications include water treatment, food, textiles, metal processing, mining, glass making and others. Around three-quarters of end use demand tracks GDP growth.
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Caustic Soda
Process Technologies
Nearly all caustic soda is generated by the electrolysis of sodium chloride solution using one of three cell types: mercury, diaphragm and membrane cells. The electrolysis process produces 2.25 tonnes of 50% caustic soda with each tonne of chlorine.
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