Market summary:
US caustic soda spot prices in the export and domestic barge markets were viewed as stable, sources said during the week ended 29 July.
This week, US Gulf producers cited low inventories and a tightening in overall supply. One producer said the US Gulf was supplying more material to the US east coast than Europe, further cinching supply.
Buyers maintained that the tightness was a perception and anticipated supply to lengthen and prices to soften.
Demand was considered healthy, particularly in the alumina, pulp and paper and basic chemical sectors, according to market sources.
Exports:
The US caustic soda export range was unchanged this week, sources said.
The low end of the range represents diaphragm-grade material, while membrane-grade product was viewed between $430–450/dmt.
Export trading was considered quiet this week.
Spot barge:
Traders said spot activity was thin this week, particularly in the domestic barge market.
One source said barge loads were difficult to obtain from the US Gulf this week, given that many barges are upriver to replenish customers stranded from deliveries during the prolonged high water levels on the Mississippi river. The elevated water levels disrupted barge traffic from late May to mid-June.
Contracts:
Market players held ongoing discussions on the latest round of price increases of $25–35/dry short ton (dst) proposed by two US producers in late June and early July.
However, consensus on July contract values was not reached this week.
Market perspectives remained mix on whether a $50/dst announced by all US producers in the second quarter was successfully implemented.
Several producers were confident that the $50/dst price hike was reflected in July pricing.
But at least two consumers said July values were settling in the mid-$400s/dst, with no change from June values.
Operating rates:
The US chlor-alkali operating rate for June was 92%, slightly higher than May, according to the Chlorine Institute’s figures released on 25 July.
The Chlorine Institute’s monthly production statistics showed June’s industry chlor-alkali output was 1.01m short tons (915,023 tonnes) of chlorine and 1.052m short tons of caustic soda. May’s chlor-alkali operating rate was at 90%.
One caustic soda distributor said June’s rate showed that supply is lengthening.
A major caustic buyer said the rates are as expected, given that chlorine derivative exports remain profitable and demand is healthy.
One producer noted that since chlorine demand influences caustic supply, an expected slowdown in the third quarter for chlorine would eventually lead to lower chlor-alkali operating rates. As a result, caustic prices would be on the rise, the source said.
Chlor-alkali caustic sources are expecting a slightly lower rate for July because of producer PPG Industries’ scheduled two-week maintenance turnaround at its Lake Charles, Louisiana, unit this month.
| February | March | April | May | June |
| 89% | 92% | 89% | 90% | 92% |
Source: The Chlorine Institute
Industry news:
US rare earths mining company Molycorp is building a chlor-alkali plant as part of its mine expansion in Mountain Pass, California, the company said on 25 July.
Molycorp will use the chlor-alkali plant to produce chlorine and caustic soda used in the leaching and extraction processes of rare earths mining, according to a company official.
Both acid and alkali solutions are used, which created saltwater as an end-waste that Molycorp was dumping in the remote area around the mine.
Building a chlor-alkali plant creates a “closed loop” that recycles saltwater to create the acid and alkali needed for the mining process, improving overall efficiency.
Details on how much chlorine and caustic soda will be consumed by Molycorp were not immediately available. All chlorine and caustic soda produced would be reserved for Molycorp’s internal use.
Several US caustic soda market sources were dubious of any potential impact of Molycorp’s chlor-alkali plant, given its size and the rarity of its products.
However, one source said the efficiency of smaller chlor-alkali units has become a tangible option for caustic end-users in remote areas because of increasingly difficult logistics in transporting chlorine, as well as stable US power rates.
($1 = €0.70)
This week on ( www.icis.com ):
28/07/2011 18:25 Belgium’s Solvay hopes to retain pricing power as output recovers
28/07/2011 01:29 Mexichem Q2 profit up 65% on new acquisitions
27/07/2011 10:07 China’s Xinjian Huatai shuts PVC, caustic soda plants after fire
26/07/2011 20:54 US OxyChem expects moderation in second half on seasonal slowdown
26/07/2011 15:36 US OxyChem Q2 earnings soar to $253m on exports demand, margins
26/07/2011 12:03 China’s Hubei Xingrui Chemical to build new caustic soda plant
