The US produced 971,229 short tons (881,099 tonnes) of chlorine and 1.02m dry short tons (dst) of caustic soda during the month, up by more than 11% compared with February chlorine production 872,718 short tons and caustic soda production of 925,628 dst, according to the industry group's monthly survey.
March 2014 production was down about 7% from March 2013, but comes after strong production in January and February that may have built inventory. Additionally, severe winter weather forestalled some industrial activity and delayed the beginning of the spring construction season, lowering demand.
Production rates moved down to 81% in March to reflect additional production capacity having entered in the market. Still, real production so far this year is slightly ahead of 2013. The institute also downwardly revised February's rates to 83% and January's to 85%, apparently to accommodate the new production capacity, according to the monthly production and shipment report.
The production survey includes producers who account for 93% of total US production. The March figures said that an average production of 342 tons/day were offline in March.
Dow-Mitsui, Westlake Chemical and Occidental Chemical (OxyChem) are in the midst of starting new plants that would add 1.34m electro-chemical units (ECU) per year in production of chlorine and caustic soda to the US market. That amounts to 1.34m tons of chlorine and about 1.47m dst of caustic soda through the electrolysis process that creates the two molecules in an approximate 1:1.1 ratio.
US producers of caustic soda have increased prices about $30/dst FOB (free on board) across February, March and April. Producers of polyvinyl chloride (PVC), which consumes about 20% of chlorine production, have increased domestic contract prices from 7 to 8 cents/lb ($154-176/tonne) during the first three months of the year.
Prices for chlorine have lowered in recent weeks in the spot markets, averaging about $150/ton.
US exports of liquid caustic soda are down 15% during the first two months of the year, as US caustic has become priced out of some markets. US imports of caustic are up 54% as foreign product has become more competitive with US prices.
Major US chlor-alkali producers include Dow Chemical, OxyChem, Axiall, Westlake, Shintech and Formosa Plastics.