Chlor-alkali operating rates were slashed 11% from April to May in the US
to an effective rate of 81%, according to data released by the Chlorine
Institute Thursday.
Chlor-alkali makers produced 29,606 st/day of chlorine gas and 24,210
st/day of liquid chlorine in May, and shipped an average of 7,443/st.
Producers also manufactured 31,060 st/day of caustic soda, according to the
report.
The lower operating rates were said to be a result of reduced demand for
PVC, which consumes about 38% of US chlorine. The reduced rates, however,
were not expected to have a negative impact on chlorine or caustic soda price
initiatives. For July, producers have issued $50-75/st price hikes on chlorine
and $35-50/st on caustic soda.
The price increase for chlorine was heard to have solid momentum behind
it as demand was firm from outside the vinyls chain.
"There are only a couple merchant sellers of chlorine," a source said.
Even if PVC makers cut rates, most producers will not sell their chlorine
to the market, the source added. Also, since rates have been reduced 11%,
producers are already working to tighten up the market in general, a seller
said. As for caustic soda, the reduced rates were expected to tighten supply
enough that the new increases would likely go through, a producer said.
"Once the bleach season ends, if the economy has not gotten better,
prices may come down," the producer added. The same source believed this could
happen at the end of the summer.
June caustic soda contract prices were talked around $320/st FOB plant,
while June chlorine contracts were at roughly $270/st FOB plant.
to an effective rate of 81%, according to data released by the Chlorine
Institute Thursday.
Chlor-alkali makers produced 29,606 st/day of chlorine gas and 24,210
st/day of liquid chlorine in May, and shipped an average of 7,443/st.
Producers also manufactured 31,060 st/day of caustic soda, according to the
report.
The lower operating rates were said to be a result of reduced demand for
PVC, which consumes about 38% of US chlorine. The reduced rates, however,
were not expected to have a negative impact on chlorine or caustic soda price
initiatives. For July, producers have issued $50-75/st price hikes on chlorine
and $35-50/st on caustic soda.
The price increase for chlorine was heard to have solid momentum behind
it as demand was firm from outside the vinyls chain.
"There are only a couple merchant sellers of chlorine," a source said.
Even if PVC makers cut rates, most producers will not sell their chlorine
to the market, the source added. Also, since rates have been reduced 11%,
producers are already working to tighten up the market in general, a seller
said. As for caustic soda, the reduced rates were expected to tighten supply
enough that the new increases would likely go through, a producer said.
"Once the bleach season ends, if the economy has not gotten better,
prices may come down," the producer added. The same source believed this could
happen at the end of the summer.
June caustic soda contract prices were talked around $320/st FOB plant,
while June chlorine contracts were at roughly $270/st FOB plant.
