US caustic soda prices were expected to continued to be bullish in the next couple of months due to tight supply amid news of restructuring chlor-alkali industry plans and additional new capacity.
Planned and unplanned turnarounds maintained US caustic soda prices near $385/st FOB this week. Sources said producers were expected to keep targeting a 5-cent price increase during January to compensate for low margins in the chlorine market.
Last week, Olin Corporation announced plans to convert its 260,000 tons of mercury cell capacity at Charleston, Tennessee, to 200,000 tons of membrane capacity to produce both potassium hydroxide and caustic soda.
According to the company this project would have an estimated capital cost of nearly $160 million and will be completed by the end of 2012. The project also include the reconfiguration of its Augusta, Georgia facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site.
The company expects that this action will reduce its chlor alkali manufacturing capacity by 100,000 tons. Early November, the company also announced its decision to relocate Winchester centerfire ammunition operations from East Alton, Illinois, to Oxford, Mississippi.
The relocation, when completed, will reduce Winchester's annual operating costs by nearly $30 million.
Also, the project is expected to increase Olin's 2011 net capital spending by approximately $30 million.
Meanwhile, Dow and Mitsui & Co., Ltd., of Tokyo completed on December 16, the formation of a joint venture to construct, own and operate a new membrane chlor-alkali facility located at Dow's Freeport, Texas, integrated manufacturing complex, Dow Chemical Co. announced Wednesday.
In a press release, Dow Chemical said the new company will be named Dow-Mitsui Chlor-Alkali LLC. and is expected to begin operations in mid-2013. According to the company statement, Dow will operate and maintain the new 800 kilotons per year facility under contract to the joint venture.
As part of this joint venture Dow will market the caustic soda. Meanwhile, Mitsui's share of the chlorine produced by the joint venture will be converted to ethylene dichloride (EDC) by Dow for Mitsui's use. Mitsui will market the EDC worldwide.
--Maria Eugenia Garcia
Planned and unplanned turnarounds maintained US caustic soda prices near $385/st FOB this week. Sources said producers were expected to keep targeting a 5-cent price increase during January to compensate for low margins in the chlorine market.
Last week, Olin Corporation announced plans to convert its 260,000 tons of mercury cell capacity at Charleston, Tennessee, to 200,000 tons of membrane capacity to produce both potassium hydroxide and caustic soda.
According to the company this project would have an estimated capital cost of nearly $160 million and will be completed by the end of 2012. The project also include the reconfiguration of its Augusta, Georgia facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site.
The company expects that this action will reduce its chlor alkali manufacturing capacity by 100,000 tons. Early November, the company also announced its decision to relocate Winchester centerfire ammunition operations from East Alton, Illinois, to Oxford, Mississippi.
The relocation, when completed, will reduce Winchester's annual operating costs by nearly $30 million.
Also, the project is expected to increase Olin's 2011 net capital spending by approximately $30 million.
Meanwhile, Dow and Mitsui & Co., Ltd., of Tokyo completed on December 16, the formation of a joint venture to construct, own and operate a new membrane chlor-alkali facility located at Dow's Freeport, Texas, integrated manufacturing complex, Dow Chemical Co. announced Wednesday.
In a press release, Dow Chemical said the new company will be named Dow-Mitsui Chlor-Alkali LLC. and is expected to begin operations in mid-2013. According to the company statement, Dow will operate and maintain the new 800 kilotons per year facility under contract to the joint venture.
As part of this joint venture Dow will market the caustic soda. Meanwhile, Mitsui's share of the chlorine produced by the joint venture will be converted to ethylene dichloride (EDC) by Dow for Mitsui's use. Mitsui will market the EDC worldwide.
--Maria Eugenia Garcia
