APLA ’18: Caustic soda downtrend causes concern among Latin American producers

CANCUN, Mexico (ICIS)–Latin American caustic soda producers expressed concerns regarding weakening market conditions that started in late September, tracking domestic price declines of as much as $68/dry metric tonne (dmt), depending on the country in Latin America.

“I’m apprehensive about next year’s business because of falling prices,” said a producer despite having secured caustic soda transactions for delivery in the region later this year and chlorine deliveries in the Caribbean.

With US caustic soda prices shaving $205/dmt FOB USG since late August, regional sellers fear that prices may move further down this year and reduce margins even more. “Demand is relatively good, but price continues to go down. We continue to see low margins,” the source added.

Reduced caustic soda consumption by the Norsk Hydro Alunorte alumina refining plant in Brazil continues to be the cause for excess caustic soda supply in the Americas, resulting in lower prices. “There is excess material globally,” the source noted.

ICIS caustic soda prices for Latin America are assessed within a $650-845/dmt ex-tank range, depending on the country.

Caustic soda producers Latin America are Unipar Indupa, Braskem, Unipar Carbocloro, Dow, Mexichem and Quimpac.

The APLA annual meeting runs through Tuesday.