After struggling to introduce price hikes in 2012, US caustic soda producers maintain demand is good across majority of consumer segments

Mathew Kearney

LONDON , May 7, 2013 (ICIS Chemical Business) – The various uses of caustic soda are outlined. The American caustic soda market is in flux in the week ended 29 Mar 2013. After struggling to introduce price hikes in 2012, caustic soda producers maintain that demand is still in good health across the majority of consumer segments, if not all of them. However, several purchasers claim global economic uncertainty is affecting their demand for the product. This is particularly true for major alumina producers, the single biggest consuming sector, several of which cut operations in 2012. In Latin America, the market was assessed as being stable. With the week ended 29 Mar 2013 shortened by the Easter holiday, participants did not do business during the latter part of the week. The market was marked by dampened activity and muted discussion. In 2013, demand from major consuming sectors in the region has been robust across the board, which is expected to persist through the year.

In Brazil, production issues due to a power blackout in Nov 2012 have resulted in tightness. As facilities normalize production and as significant volumes are imported, the market in Brazil has been easing. In late-Feb 2013, major US producers revealed price increases of $30/dry short tonne (dst) to $50/dst. The increases take effect on 1 Apr 2013 or as allowed by contracts. The reason cited by the producers were the tightness in supply due to a round of planned and unplanned outages and a decrease in operating rates in Jan 2013 after a strong Dec 2012. However, buyers challenge this claim of market tightness. The article includes a table that details caustic soda capacity by company and location for 10 US companies. A mixed forecast is given for prices, depending on whether and by how much the home construction sector in the US recovers in 2013. Dow Chemical has capacity for 3,630,000 tonnes/year in Freeport, TX; Axiall has capacity for 1,270,000 tonnes/year in Lake Charles, LA; and Shintech has capacity for 1,100,000 tonnes/year in Plaquemine, LA. A graph entitled, US caustic soda prices, shows liquid, spot US Gulf Export prices ($/dmt) from Apr 2012 to Apr 2013. Original Source: ICIS Chemical Business, http://www.icis.com/, Copyright Reed Business Information Limited 2013.

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