European liquid caustic soda contract prices have largely rolled over into the third quarter, albeit with some selective moves in either direction, market players said on 1 August.
This relative price stability in the third quarter was despite sellers’ initial targets of increasing prices by €50-60/dry metric tonne (dmt) across the board, citing a need to recoup lost margins, following price erosion over successive quarters, along with what they considered to be less availability when compared with recent months.
However, attempts to raise prices in Q3 had been thwarted by a largely balanced market, steady to softer demand during the summer holidays and competitive pressure among certain sellers.
Producers mainly confirmed price stability to selective increases of €10-20/dmt for lower priced accounts in the third quarter. A few sellers also reluctantly acknowledged that price reductions of €10-20/dmt had been agreed, particularly for higher-priced accounts amid some competitive pressure among certain sellers.
One manufacturer had said that price increases had not been possible in its case amid aggressive offers from one main player in parts of Europe. It said it had forced to lower its Q3 prices by €10-20/dmt in some cases, although rollovers were also possible. It quoted its price at €340/dmt on average for Q3.
Another producer, however, said it remained firm and refused to accept any price reductions and instead had concluded its Q3 business with rollovers and increases of up to €20/dmt for lower priced accounts in parts of northwest Europe. However, price rises were not confirmed on the buy-side.
Buying and trading sources, however, confirmed mainly price stability and some decreases of €5-20/dmt for their Q3 business.
One large volume consumer said it had secured an average drop of €20/dmt for its Q3 business, quoting its price at €330/dmt FD (free delivered). It attributed the price relief to its suppliers being keen to secure volumes, amid what it considered to be abundant supply and regular demand.
SIGNS OF SLOWDOWN
Consumption is holding up reasonably well, although some ongoing economic constraints continue to affect certain end-sectors and the summer slowdown in activity has been noted, particularly in the Mediterranean.
The market is largely balanced, although there was some supply disruption from Egypt, which had reduced availability in parts of the Mediterranean.
However, others said that any supply limitations from Egypt was being counter-balanced by lower demand during the summer holidays and talk of some import availability from the US Gulf, northwest Europe and possibly the Middle East, although the latter was not confirmed at source.
FOB prices have been relatively steady during Q3 amid a largely balanced market.