EU caustic soda imports spike in 2017 on capacity closures

LONDON (ICIS)–EU imports of caustic soda liquid spiked in the fourth quarter of 2017 after European producers were obliged to close mercury cell-based capacities.

According to the latest data from statistical agency Eurostat, imports also rose during 2017 as whole.

The shift in import-exports was particularly noticeable in the second half of the year, with imports spiking during the October-December quarter.

This coincided with producers closing most of the remaining mercury-cell based caustic soda capacity in Europe ahead of the deadline imposed by EU regulations in December.

Caustic soda producers in the EU had to switch to membrane-based technology after 11 December 2017 or shut down their plants, except for the producers who were granted extensions.

Market players have also noted that the European market began to return to balance in December after tightening earlier in fourth quarter, as a result of large volumes of imports into the Mediterranean.

Structurally speaking, the European market has become shorter from 2017 onwards.

There are various scenarios by which producers can continue to fulfil demand, with the most likely being reducing exports and increasing utilisation rates, which have hovered around or under 80% since the financial crisis of 2008-2009.

Another scenario would involve major import markets such as Italy and Turkey increasingly relying on non-European sources for caustic soda, including the US and various players in the Middle East.

With exports decreasing and imports rising in 2017, the beginning of both of these trends may already be appearing in the market.

EU caustic soda liquid (tonnes)
	Imports	Exports
2016	1,022,610	517,867
2017	1,198,960	431,626
Change	17.25%	-16.65%

Eurostat import/export data is subject to revision as more detailed information becomes available. EU figures comprise the aggregate of member states data published by Eurostat.

Pictured above: Spain’s Ercros Vila-Seca caustic soda plant in Tarragona. The producer expanded membrane-capacity at the site
Source: Ercros

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