EU chloralkali markets weaken in H2

EU Cl2 Jan13.pngChlorine and caustic soda production are a key indicator of economic growth. They have been produced in large volumes for over a century, and have a extremely wide range of uses from pharmaceutical and aluminium production to detergents and disinfection. The blog’s mid-year review of European data from Eurochlor showed worrying signs of a slowdown, with chlorine production down 3% versus 2011 levels.

Full-year data shows that producers continued to act responsibly to avoid a repeat of the problems seen in early 2009:

• Total 2012 chlorine production was down 1.9%, following a 0.6% fall in 2011
• Operating rates remained low at an H2 average of 75.7%
• Even so, caustic soda stocks ended at 241KT versus 233KT in 2011

The key to success in H1 had been strong sales of PVC and caustic soda into export markets. This position continued in H2 on PVC, with net exports up 4% versus 2011 to October, based on data from Global Trade Information Services. But net caustic soda exports were down 23% to the end of October. And worryingly, the two largest country markets both slowed. PVC sales to Turkey were down 26% (100KT), and caustic sales to the US down 17% (30KT).

Update. On Friday, Ineos ChlorVinyls announded it was closing 3 PVC plants, and one chloralkali cellroom. CEO Chris Tane blamed the closures on “current and expected economic conditions impacting demand across Europe,”

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


Leave a Reply