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 2020
Despite some Asian producers’ turnarounds in Q1, some spot availability was seen from China in February as producers in the country turned to the export market amid sluggish domestic conditions due to the coronavirus outbreak. Supply soon turned into excess as the coronavirus pandemic caused regional demand to weaken, as well as posing significant logistical challenges.
With caustic soda seeing diverse end-use in the manufacture of pulp and paper products, alumina, soap, water treatment and textiles, economic concerns brought about by the coronavirus epidemic affected regional demand. Multi-year lows for aluminium prices on the London Metal Exchange also weighed heavily on sentiment. Bearish factors for derivatives of co-product chlorine such as polyvinyl chloride (PVC) also affected chlor-alkali producers’ electrochemical unit (ECU) margins.
The European caustic soda market tightened in the second half of Q1 as demand for co-products fell. The coronavirus pandemic and lockdown in economic and manufacturing activity reduced consumption of chlorine in downstream markets such as PVC. This caused decreased chloralkali production, including caustic soda, beginning in March. In addition, a number of production issues tightened availability in the Mediterranean. As a result, caustic soda spot prices trended upwards.
European caustic soda demand trends were mixed depending on application. The coronavirus caused the European economy to deteriorate, which impacted demand for caustic soda in chemical applications. However, demand for hygiene applications such as soaps and detergents increased because of the growing concern, whilst water treatment applications remained stable.
Updated to Q4 2019
Caustic soda supply in Latin America during the fourth quarter 2019 was abundant. Caustic soda demand from Brazil’s alumina refiner Alunorte slightly improved as the company raised operating rates to about 80% of capacity since local authorities lifted restrictions due to concerns about environmental contamination. Availability was ample despite the salt extraction halt in Alagoas that resulted in shortage of brine and reduced caustic soda production. Shipments of US product to Brazil were frequent.
Caustic soda demand in Latin America during the fourth quarter 2019 was sluggish due to oversupply, except for the May-July period when subsidence at the Alagoas salt mine resulted in shortage of brine and buyers tried to find alternative suppliers. Demand in Argentina was weak on the country’s economic and political issues, high inflation and currency devaluation. Demand in Mexico was moderate, but large availability from the US created a strong competitive environment.
Updated to Q1 2020
Planned plant maintenance outages decreased US caustic soda supply during the first quarter. Several plants undertook maintenance in late February and into March, reducing supply and prompting separate contract price increase announcements from producers. The shorter supply factor continued into the second quarter as demand picked up from water treatment plants.
Demand improved during the first quarter for caustic soda into the pulp and paper industry as demand for paper products, such as masks and disposable gowns, cleaning wipes and other cleansing products picked up with the onset of the coronavirus pandemic. Toward the end of the quarter, seasonal demand for caustic for water treatment purposes also picked up. Demand to the alumina sector was steady through most of the quarter.
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.
Chlor alkali production in the US and Brazil
It has been a tough period for chlor-alkali producers as recent months showed a sharp downturn in margins for caustic soda. This scenario threatens to bring to an end the period of strong margins, despite some signs of a limited rebound earlier in Q4 2019. Across all major markets, calculated margins based on the co-production of caustic soda and ethylene dichloride (EDC) have weakened substantially since October 2018.
Like many others, if you are looking for ways to unveil answers to key industry questions then come and join us at the 24th World Chlor-alkali Conference organised by ICIS and Tecnon Orbichem. This 1.5 day event has been a home for key industry players in the value chain, having welcomed hundreds of delegates each year. Take a first look at the key offerings in 2020.