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US Caustic Soda Exports Fell in Q1 2021, Prices Show Some Recovery Ahead of Recovering Demand

US Caustic Soda Exports Fell in Q1 2021, Prices Show Some Recovery Ahead of Recovering Demand

  • 10-May-2021
  • Journalist: Jaideep Kumar

According to latest US International Trade Commission (ITC) data, Caustic Soda exports have fallen by 3% in the first quarter of 2021 as compared to same period last year. Major cause has been the February deep freeze which forced around 74% of total of chlor-alkali capacity to went offline on the US gulf coast. Around 90% of the US chlor-alkali capacity is on the coast which faced the brunt of subfreezing temperature disrupting exports.

As per the data, US exported nearly 1.37 million metric tonnes of Caustic in Q1 of 2020 whereas its total of 1.33 million metric tonnes was recorded in the first three months of 2021. Sharp fall has been witnessed in Caustic Soda volumes in the month of March when the exports fell by one-third to 307 thousand tonnes as compared to February 2021.

Producers remained cautious of the leaks, cracks and other damages which might have caused to the pipelines of the plants by the subfreezing temperatures. Watchful approach from the producers meant restarts of plants were slow in March, while several producers waited for upstream cracker restarts for Ethylene feedstock. Data signified that Brazil; a top importer of US Caustic Soda witnessed a sharp decline of 30% in its imports during March as the figure fell to around 198 thousand tonnes from 278.17 thousand tonnes in February 2021. At the same time, some market participants have also reported significant rise in the import volumes from Europe and Asia despite US being the net Caustic exporting country.

Demand for Caustic Soda witnessed continued recovery in the US during Q1, but seasonal factors somewhat affected that recovery trend. The month of March typically sees higher demand on seasonal factors and marks the beginning of rising demand. As the US economy head towards recovery, US Caustic Soda has seen much needed improvement in the first quarter. Not only the US but international Caustic pricing in Asia and Europe are also improving because of the strong demand and recovery in the industrial production around the world. Demand for the US Caustic Soda showed better recovery following a difficult 2020. FOB Texas Caustic Soda rates rose from USD 255 /MT levels observed in mid-January to USD 290 /MT by March-end.

Caustic Soda (Sodium Hydroxide) is a strong alkali possessing the chemical formula NaOH. Caustic Soda finds its varied applications in alumina production, pulp and paper industries as well as soaps and detergents. Caustic is produced as a by-product during chlorine production.

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