Rising Sodium Chlorate Prices Globally Amid High Energy Costs and Increased Demand
Rising Sodium Chlorate Prices Globally Amid High Energy Costs and Increased Demand

Rising Sodium Chlorate Prices Globally Amid High Energy Costs and Increased Demand

  • 06-Sep-2023 2:24 PM
  • Journalist: Nicholas Seifield

Sodium Chlorate prices have been rising across the globe on account of high energy prices and increasing demand. In May 2023, the prices of Sodium Chlorate were assessed at USD 995/MT FOB in France, which rose to USD 1050/MT in August 2023. Sodium Chlorate is primarily used to bleach kraft paper, agricultural purposes, and explosives. The demand from pulp and paper industries in Europe, the Americas, and Asia has been rising due to improved logistical supply chains and environmental concerns relating to plastics and sustainability.

In Europe, Sodium Chlorate prices have increased significantly because of high energy prices coupled with disruptions in supply chains. The demand for paper in Europe is also showing a positive increment, which is expected, and the energy prices are still inflated compared to prepandemic levels. One Market participant revealed that the seasonality caused a significant spike in demand in the paper market in Europe. The Supply got constricted as recoverables were below expected, causing a price rise of Sodium Chlorate in England to a significant extent.

In the Americas, the prices of Sodium Chlorate have increased continuously for the past three months in the US. Inquiries revealed that the demand from the demand from the pulp and paper industries remained strong. Market participants revealed that the demand from pulp and paper industries is expected to rise as consumption is expected to increase in the coming months. US Federal Reserve is expected to provide monetary relief as inflation falls is expected to fall below 3%. Manufacturers have improved their utilization capacity to fill the inventories. FOB Texas price is assessed at USD 970/MT in August 2023, showing a 9% increase since the beginning of 2023. Brazil showed a similar trend as the United States, with a marginal variation due to the inflation differential between the two countries. Brazil’s exports to Asian countries also showed a marginal improvement.

In Asian markets, especially in the Chinese market, the price of Sodium Chlorate declined in August 2023. Inquiries revealed that the demand slump due to weak economic recovery indexed through the decline in packaging volumes and retail sales has led to oversupply of Sodium Chlorate in the Chinese market as the paper and pulp manufacturers have higher inventories and lowered their operating capacities in the current context. In India, the markets show a rising trend following Brazil’s trend as a majority of imports of Sodium Chlorate are imported in India through South America. The demand for paper in India is expected to increase as imports in the Q1 of 2023-24 show roughly a 40 percent increase on a YoY basis. Along with the paper, the space and defense sector demand also shows improvement.

As inflation is expected to decline along with energy prices, especially in Europe, the prices of Sodium Chlorate are also expected to mellow down.

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