Updated to mid-November 2009
European market review by Stephanie Wilson, ICIS pricing
European chlorine production was reasonably flat over August and September, improving just 0.4% from month to month from 770,500 tonnes to 770,947 tonnes.
Output was limited due to a number of major chlor-alkali force majeures, while operating rates were closely controlled due to tumbling caustic soda values (a co-product of chlorine), which could not be offset by low downstream polyvinyl chloride (PVC) prices. PVC is the main end use for chlorine.
As sentiment in the PVC market weakened due to US import pressure and hesitant buying patterns ahead of the year end, there were signs of further curtailments in October.
Average daily production fell 0.75% from the previous month, while the average capacity utilisation rate dipped 0.5% on the back of weakening sentiment in the downstream PVC market.
However, chlorine production in October remained higher at 790,637 tonnes as numerous chlor-alkali facilities came back on stream following the prolonged force majeures.
US market review by Judith Taylor, ICIS pricing
By mid-November, US chlorine contract prices remained at the benchmark high $390-410/st (short ton) range established in the third-quarter.
Chlor-alkali producers were not forthcoming about the fourth-quarter chlorine contract prices and buyers were not yet discussing initiatives.
The main factor underlying the stalled chlorine contract prices was the slow recovery of co-product caustic soda, returning from historic low prices that bottomed at about $25/tonne in the export market.
Chlor-alkali producers sought to raise production rates between July and September, edging July’s operating capacity to 79% from June’s 77% and May’s 72%.
According to statistics from The Chlorine Institute, Augusts’ operating rates rose to 85%, but September’s dipped to 80%.
The fluctuations in operating rates was said to be caused by a maintenance run at one supplier’s plant combined with efforts by each supplier to find a balance on the rates that would stabilise co-product caustic soda output and relieve tightness in chlorine.
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Chlorine
Uses and Outlook
Chlorine is used in the manufacture of many different products including polyvinyl chloride (PVC), organic and inorganic chemicals, agrochemicals and pharmaceuticals as well as chemicals for water treatment and sterilisation.
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Chlorine
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Chlorine with its co-product caustic soda is manufactured primarily by the electrolysis of sodium chloride solutions. The primary raw material is common salt, usually in the form of underground deposits which are brought to the surface as a solution in a pumped high pressure water supply. The solution is often called brine. The electrolysis process produces 2.25 tonnes of 50% caustic soda with each tonne of chlorine.
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