APLA ’18: Brazil caustic soda business to improve in ’19

Luly Stephens

12-Nov-2018

CANCUN, Mexico (ICIS)–Brazilian caustic soda business should improve in early Q2 2019 despite the current sluggish market scenario, a Brazilian seller stated.

“My perception is that price will go up in the second quarter of 2019 if Norsk Hydro Alunorte alumina refiner comes back online and starts running at 100% capacity,” the source said. Full participation of that plant would be “a game changer”.

Buying interest for caustic soda in the country started to decline in late September on regional downward pressure, which resulted in lower prices in Brazil. The supplier added that sellers are trying to reduce inventories globally by the end of the year. However, the seller expects supply and demand to be more balanced and “a bit tight” as producers continue to run plants at around 85% capacity across the globe.

Traditionally, business activity in Brazil tends to slow down towards the end of the year through March due to Christmas and Carnival celebrations. Therefore, domestic demand is expected to pick back up in late Q1 or early Q2 2019, potentially resulting in improved profit margins for suppliers.

Braskem, Unipar Carbocloro, Dow are caustic soda producers in Brazil.

The APLA annual meeting runs through Tuesday.

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