HOUSTON (ICIS)--US chlor-alkali export options look strong going into 2014, as lower natural gas and overall energy costs in the US offer good ECU (electrochemical unit) margins.
The US domestic market is more stable than a number of other key global markets, allowing producers opportunities to contract widely in the domestic side and move significant tonnage into exports.
In the vinyls chain segment of the chlor-alkali business, polyvinyl chloride (PVC) export prices are on the upswing at the end of December and are expected to maintain strength well into 2014.
PVC buyers and sellers said the majority of production is sold-out for December and January, with sellers contracting most domestic requirements and placing the remainder of production into the export market.
PVC export prices recently moved up to $910-930 FOB (free on board) US Gulf and are expected to have upward pressure on these levels in January because of global export opportunities in regions such as Turkey and India.
One consequence in the domestic market is that there is little if any spot PVC business.
Several large US PVC producers announced 3 cent/lb ($66/tonne) increase initiatives for January, with at least one producer also announcing a 2 cent/lb initiative for February.
Looking at the caustic soda side of the chlor-alkali equation, domestic prices are anticipated to remain steady going into 2014, while export prices bottomed out, then by the end of 2013 showed potential to rise slightly.
Most US caustic soda producers have announced $40-50/dry short ton (DST) increases, effective for January domestic business.
US caustic soda export prices were pushed down in the third quarter of 2013 by a significant outage at a key alumina production site in Brazil.
This outage fostered a backwash of about 20,000 tonnes/month of US Gulf (USG) caustic soda that would typically ship to Brazil and shoved FOB US Gulf export prices into the mid-$200s/dry metric ton (DMT) for a short time.
Once the alumina production site was back on line and at least four major integrated USG chlor-alkali maintenance turnarounds took place, caustic soda export prices strengthened to $300/DMT.
RECENT US PVC PRICES