Europe caustic soda Q1 price falls 10% as market readjusts

Chris Barker


LONDON (ICIS)–Caustic soda contract prices in northwest Europe have fallen for the first quarter as availability remains balanced-to-long and the market continues to readjust following previous increases.

Caustic soda contract prices were assessed at €470-515/dmt (dry metric tonnes) FD (free delivered) NWE (northwest Europe), down €50/dmt on the low end and €65/dmt on the high end.

In the Nordic countries, the market lengthened in the second half of 2019 because of both reduced demand and the higher substitution of imported volumes for European product, according to sources.

The knock-on effect of the longer Nordic market, combined with unexceptional demand and availability via imports, resulted in prices settling with decreases in northwest Europe.

In addition, sources recorded larger discounts for buyers against pricing indexes – meaning that lower prices were effectively paid compared with the previous quarter.

Absolute prices paid in Germany, Belgium and the Netherlands were in a wide range – between the very low €500s/dmt FD and the low €400s/dmt FD – depending on the buyer, geographical location and terms of the business taking place.

The majority of business was recorded between the middle and upper levels of the €400s/dmt FD.

Price decreases were also on a wide range with some as large as €80/dmt, according to sources.

Average price levels in northwest Europe are now slightly below those in the third quarter of 2017.

This reflects the gradual erosion of contract price increases which took place in late 2017 and early 2018, and followed the closure of mercury cell capacities in Europe.

Quarterly price changes in France and the Nordic markets were also in the double digits, with a wide range of price changes depending on starting levels and the players involved.

However, caustic soda free on board (FOB) spot prices are considerably lower and subdued demand and lower prices in the related isocyanates and polyvinyl chloride (PVC) markets has put producers’ margins in a worse position relative to that time period, according to sources.

Caustic soda is used in the manufacture of pulp and paper products, alumina, soap, water treatment and textiles.

Front page picture source: Shutterstock

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