Chlor-Alkali Production Cuts Would Balance the Caustic Soda Prices, Says Westlake Chemical Corp.

As per the quarterly results of US chlor-alkali giant, Westlake Chemical Corporation, halt in global production and construction activities backed by softened PVC demand, has pressurized the feedstock Chlorine, during COVID-19. This demand downturn has impacted the overall chlor-alkali production, thereby affecting the supply demand balances for co-products like Caustic Soda. Decline in the volumes of Chlorine and its derivatives have pushed up the rates of company’s Caustic Soda whose demand is strong amid economic weakness. The officials stated that its Caustic Soda performed relatively well in most of the sectors, especially packaging, disinfectants, and water treatment chemicals, even during the lockdown period. Curtailed plant operation rates would further push the Caustic Soda prices on upper edge and an increase momentum could be observed after the recovery starts. In February, the company’s Caustic Soda price stood at $40 per tonne which rose to $60 to $70 per tonne in March. As compared to Caustic, the company has witnessed likely lower margins in PVC industry during the quarter. Overall, the company expects a negative impact on its second quarter financial results due to weak performance of its chlor-alkali Vinyls business.