Our Caustic Soda reports are published weekly in Asia, China, Europe, Latin America and the US, giving industry participants a truly global view of market movements.
There are solid and liquid spot quotations, depending on the region, and market news including information on shipping, international trade, upstream and downstream movements, as well as production issues. This analysis and intelligence equips you with the information you need to make vital business assessments.
Updated to Q1 2019
European domestic production and supply availability of caustic soda was reduced in Q4 2018 due to production issues in northwest Europe and France and low water levels on the Rhine. However, import availability – particularly in the Mediterranean – remained high. This followed an increase in shipments from the Middle East and Asia due to long markets in both regions. Shipments from the US to the Mediterranean and Nordic markets also increased.
European caustic soda demand was stable to slightly lower in Q4 compared with the previous quarter. Demand fell in late November and December as market players reduced stock positions before the end of the year. Falling prices in the Mediterranean during most of the quarter also deterred buyers. However, for most markets and for the majority of the quarter, downstream activity and demand were similar to that seen in Q3.
Continued abundant availability is forecast for Latin America in Q1 2019, as alumina refiner Alunorte is expcted to continue at a rate of 50%. Participants noted uncertainty as to when Alunorte could increase rates to normal, as no timetable has been announced. Supply in the Americas could tighten once Alunorte increases alumina production rates.
Caustic soda demand in Latin America is expected to remain steady in Q1, continuing a trend seen in Q4. Demand from Alunorte is expected to remain at 50% of previous levels with no agreement on when normal production will resume. Elsewhere in the region, demand is likely to remain stable at current moderate levels, although demand from the paper/pulp sector is expected to be healthy following an improvement in exports.
Lengthening supply during Q4 2018 sent US spot caustic soda prices lower for both domestic barges and for export parcels. The longer supply was a direct result of an outage at Alunorte, an alunina refiner in northern Brazil that was expected to buy 600,000 dmt out of the US. However, the refiner’s consumption was only half that rate in 2018, displacing an unexpected 250,000 dmt during the last half of the year.
Demand for US liquid caustic soda remained steady in the US domestic market with a slight seasonal decline for water treatment purposes as cooler weather arrived. Spot export demand remained relatively steady for most of the year, but at a lower level than previous years, throwing US production plans out of sync. Demand for pulp and paper production, chemical processing, soap and detergent manufacture and textiles remained steady
Spot volumes from South Korea are expected to be minimal in Q1 2019. South Korean producers will be concentrating on building up inventories to cater for domestic downstream expansions due to come online by mid-2019. Despite this, the supply from other northeast Asian producers is expected to remain long during Q1 2019 due to mounting inventory pressures caused by the ongoing halt of exports into India.
Downstream demand in China is expected to recover after the Lunar New Year. Increased domestic demand of 120,000 dmt/year is expected from expansions to South Korea’s epoxy resin, super absorbent polymer, semiconductor and oil and gas sectors, which will come online in the first half of 2019.
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Caustic soda, with its co-product chlorine, is produced via an electrolysis of brine, in the ratio of one part chlorine to 1.1 parts caustic soda.
Caustic soda is a white, deliquescent solid in various forms with no odour. It is very soluble in ethyl alcohol and water. It is a strong base, reacts violently with acid and is corrosive in moist air to metals like zinc, aluminium, tin and lead forming a combustible/explosive gas (hydrogen). It rapidly absorbs carbon dioxide and water from air while contact with moisture or water may generate heat.
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.
The production of alumina from bauxite is a major end-use application for caustic soda.
Caustic soda is a basic feedstock in the manufacture of a wide range of chemicals. It is used as an intermediate and a reactant in processes that produce solvents, plastics, synthetic fibres, bleach, adhesives, coatings, herbicides, dyes, inks and pharmaceuticals.
Other uses include the saponification or conversion of fat, tallow and vegetable oils in soap manufacture, and in the manufacture of surfactants for detergents. It is used in the petroleum and natural gas industries to remove acidic materials from hydrocarbons and off-gases. In the textile sector, it is used in the chemical processing of cotton and the dyeing of synthetic fibres.
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