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 caprolactam (capro) supply increased across Q1 2019 due to weak downstream demand in the nylon 6 market.The capro market began to lengthen and production rates were reduced in order to counterbalance oversupply in the market. There were no capro production issues throughout the first quarter.
European capro demand had been decreasing throughout Q1 2019 due to a knock on effect from weak downstream nylon 6 consumption and the automotive industry. Buying patterns have remained low, as vehicle producers have faced a restructuring of the automotive sector. Low downstream demand has been one of the main concerns in both markets as it has caused weakness in the supply chain.
Caustic soda supply in Latin America during the first quarter of 2019 was ample. Demand from Brazil’s alumina refiner Alunorte remained at 50% of normal levels as restrictions from regional authorities were in place due to concerns of potential contamination to nearby water supplies. There was plenty of available material in Latin America during the period, as caustic soda producers in the Americas operated normally without any issues. Producers exported product to reduce inventory levels.
Caustic soda demand in Latin America during the first quarter of 2019 was sluggish, mainly due to reduced operating rates at Brazil’s Alunorte. Alumina refiner Alunorte continued to produce alumina and consume caustic soda at 50% of normal rates as imposed by local authorities over environmental concerns. Demand levels in Argentina were low due to the country’s economic situation and reduced buying power. Demand was stable in Mexico and Peru.
US liquid caustic soda supply ran long during the first quarter as displaced exports from the closure of an alumina refinery in northern Brazil reduced demand for US export volumes. Prices have continued to slip during the period of the outage, which has lasted more than a year. Slower exports to Australia have also increased US domestic supply. US chlor-alkali producers export more than 30% of total production.
Demand has been steady in the first quarter, although business activity slumped due to a number of factors. Severe weather brought deep snow and ice to much of the northern half of the country, slowing activity and resulting in flooding on the Mississippi River which slowed barge traffic. In addition, a fire at a tank farm and terminals on the Houston Ship Channel slowed shipments. These logistical tie-ups are expected to be resolved during the second quarter.
The overall demand-supply situation has tightened slightly when compared to Q4 2018 due to ongoing turnarounds in the region since mid-February. Some northeast Asian producers also stockpiled inventories on expectations that contractual shipments to India would resume within the quarter, although approvals have taken longer than expected. In late March, an explosion in China’s Jiangsu province caused dozens of fatalities, prompting some caustic soda producers in the province to stop production due to safety inspections.
Overall demand in China remained steady after the Lunar New Year holidays. Domestic demand in the country comes from various industries, such as alumina refiners, rayon, and water treatment. Australia’s downstream alumina sector has also seen new contract agreements in 2019 with caustic soda producers in Asia instead of the US.
We offer the following regional Caustic soda analysis and news coverage to keep you informed of factors and developments affecting prices in the Caustic soda marketplace.
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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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