Brazil's Sodium Chlorate Prices Grapple with Flood-Induced Disruptions and Market Uncertainty
Brazil's Sodium Chlorate Prices Grapple with Flood-Induced Disruptions and Market Uncertainty

Brazil's Sodium Chlorate Prices Grapple with Flood-Induced Disruptions and Market Uncertainty

  • 24-Jun-2024 4:23 PM
  • Journalist: Francis Stokes

Santos (Brazil): This month, the Sodium Chlorate market has experienced bearish trends. Low consumption in terminal markets and reduced enthusiasm for downstream purchasing have resulted in increased Sodium Chlorate inventories, despite constrained enterprise shipments. To stimulate downstream participation, factories lowered their Sodium Chlorate quotations, and traders offered reduced rates due to ample market inventories.

Global manufacturing PMI in Brazil rose in May 2024, marking a fifth consecutive month of expansion. However, growth was softer than April's due to severe floods in Rio Grande do Sul, which led to business closures and a drop in demand, curbing sales growth and production of Sodium Chlorate. Although new orders increased due to advertising and new product launches, growth was the weakest in five months. International sales saw slight gains but were offset by reduced demand from Africa and the US. Production remained broadly stagnant.

Firms continued to purchase inputs and hire workers, but business confidence dipped due to concerns about the economic impact of the floods. The environmental catastrophe of the Rio Grande do Sul floods has drastically changed the Sodium Chlorate market landscape, affecting both upstream and downstream aspects. Supply is currently hindered, and demand is expected to decrease in the coming months due to unfavourable market conditions for Sodium Chlorate.

In Brazil, supply remains adequate for now, but the floods in Rio Grande do Sul are expected to disrupt Sodium Chlorate capacities, potentially leading to supply shortages and increased prices soon. Market participants in the Brazilian containerboard sector are particularly concerned. The state hosts CMPC's Guaíba mill, which produces millions of tonnes of pulp annually, accounting for roughly 7.9% of the country's total pulp capacity. It also hosts several tissue producers and accounts for a significant portion of Brazil's printing, writing, and industrial packaging paper capacity downstream of Sodium Chlorate.

The Sodium Chlorate downstream paper industry in Brazil has seen low demand, expected to worsen as local industry consumption declines due to halted manufacturing lines amid the disaster. The floods are negatively impacting Brazil's GDP, with market analysts predicting a negative effect on paper products for 2024. Pulp and paper mills have been directly or indirectly affected. Market participants in the containerboard sector are particularly concerned about the impact on demand.

Sodium Chlorate exports are also expected to drop in the short term, amidst reducing packaging paper consumption. However, containerboard consumption may increase sharply in the short term as demand for boxes to send donations to affected regions rises. It remains uncertain how the net effect on consumption and shipments of corrugated boxes will balance out in May and June due to these opposing forces. Overall, market conditions for Brazil's paper industry remain uncertain due to these conflicting dynamics.

Related News

Sodium Chlorate Gains Stability in the West Muted Demand Remains a Key
  • 10-Sep-2024 4:31 PM
  • Journalist: Nina Jiang
Brazil Sodium Chlorate Prices Grapple with Flood Induced Disruptions and Market
  • 24-Jun-2024 4:23 PM
  • Journalist: Francis Stokes
Sodium Chlorate Prices Increase Amidst Elevated Demand and Inadequate Supply
  • 17-May-2024 4:58 PM
  • Journalist: Stella Fernandes
Sodium Chlorate Market Fall in US Amid Elevated Inventories Level in the Market
  • 22-Dec-2023 5:26 PM
  • Journalist: Francis Stokes