For the Quarter Ending March 2022
The market for Caustic soda witnessed an upward trajectory throughout Q1 in North America. In the first two months of Q1, USA experienced various turnarounds in Caustic Soda plants. A plant of Olin with 3 million MTPA capacity in Texas went under shutdown in mid-March. Formosa plastics with a 736 KTPA chlor-alkali capacity underwent a turnaround in mid-February. As a result of these outages, pressure was felt by traders and manufacturers for availability of material. Demand for Caustic soda was seen bullish with the onset of 2022, and supplies were observed low because of regional uncertainties in North America. Prices of Caustic soda were assessed at USD 626/MT Louisiana in USA in the month of March.
The market sentiments of Caustic Soda observed fluctuations in China in Q1 of 2022. Overall price trend of Caustic Soda followed an upward trajectory in Asian market because of planned turnarounds in USA which increased the export demand from India and China. Besides, overall price trend of Caustic Soda witnessed a decline in January because of limited enquiries and sufficient material availability with manufacturers of China. Demand for the product was observed lower than expected. Moreover, the first week of March also experienced downward trajectory in prices of Caustic Soda due to low demands from downstream industries such pulp& paper, textile, and alumina. Prices of Caustic Soda flakes were assessed at USD 517/MT FOB Qingdao in the month of March.
Caustic Soda sustained high prices in European market for Q1 2022. In Germany, gradual increment in demand resulted in upward trend in prices of Caustic Soda. Supply of Caustic Soda reached normalcy after the resumption of several plant operations in Q4 2021. Prices took an upsurge because of negligible fluctuation in the demand and supply fundamentals. Price of Caustic Soda flakes was assessed as USD 711/MT in the first week of March in European market on an FOB Hamburg basis.
For the Quarter Ending December 2021
Market sentiments of Caustic Soda remained mixed throughout Q4 in North America. Supply disruption caused by hurricane Ida continued to affect the availability in US amidst favorable demand from alumina, pulp and paper and detergent industry. In addition, shutdown of Shintech Chemicals post hurricane Ida due to equipment failure further stressed the supplies in early Q4. Supply eased in USA by late December with levelling imports from Germany following the upliftment of force majeure by Vinnolit upon its Caustic Soda plant. Besides, year-end slowdown in demand further restricted the offtakes from several major industries of Caustic Soda. Caustic Soda (50%) liquid prices in USA reached USD 550 per MT FOB Texas in November while they gradually eased by December finally settling at USD 510 per MT.
During Q4 2021, Caustic Soda Prices in Asia showcased mixed sentiments as the demand varied from country to country. India witnessed high export demand for the product from USA due to the supply disruption caused by hurricane Ida. Export demand from China also increased in early Q4 for the same reason, however due to ample production there was negligible impact upon its prices. Towards the end of the quarter, slowdown in buying activities due to the seasonal lull normalized the upward trajectory of Caustic Soda in India. Hefty shipments of Caustic Soda by year led to mounting of inventories which further pressurized its prices in India. Besides, commencement of second phase of Caustic Soda plant by Grasim Industry also stressed its prices. Caustic Soda prices in India averaged at USD 650 per MT Ex-JNPT, in December. While in China, prices remained range bound between USD 210-206 per MT FOB Qingdao throughout the quarter ending December.
In Europe, Caustic Soda market outlook remained mixed throughout Q4 following spate of turnaround due to the challenging climatic conditions in the region. A major manufacturer of Caustic Soda, Vinnolit declared a force majeure at its plants based in Germany owing to the climatic and logistic disruptions. Supply of Caustic Soda marginally eased with resumption in operations in these two plants in late-November, leading to a normalization in the price trajectory. Caustic Soda Lye prices in Germany averaged at USD 540 per MT in December.
For the Quarter Ending September 2021
During the third quarter of 2021, Hurricane Ida made a landfall in Louisiana which resulted in several plant shutdowns in the Gulf Coast of the United States. Some of the major Caustic capacities that went offline were: Shintech with a production capacity of 1.2 million MT per year located in Plaquemine, Louisiana. Other than Shintech’s plant, Westlake’s 453,592 MT per year plant at Plaquemine also got shut down due to safety reasons and power outages. Several other plants also went offline which include leading companies such as Olin, OxyChem, and others. These plant shutdowns negatively affected the supply of the material in Q3 across the region. The pricing of Caustic soda was last assembled in the last week of September at USD 470 per MT FOB Texas.
The supply of Caustic soda in the Asia Pacific region remained firm throughout the third quarter of 2021. Skyrocketing freight costs and limited production of feedstock in China led to the increment in the prices of Caustic soda across the region. In India, the halted imports of Caustic Soda for a quality check due to the standard of quality set by the government of India led to a steep rise in its prices. The prices in India escalated from USD 456/MT to USD 513/MT during Q3 2021. A Bangladesh based manufacturer revealed that he had to return the advance payment to the Indian importers, as he was unable to send cargoes of Caustic Soda of specific standard. Offtakes were firm from the downstream water treatment and alumina industries in the third quarter as well.
In the European market, Caustic Soda price FOB Hamburg oscillated around $465-450/MT at the start of October. Several European Chlor-alkali producers complained about the limited production of the material due to the hike in electricity and fuel costs followed by the strong demand fundamentals. Prices observed slight ease of $15/MT with no signs of falling below certain levels as manufacturers fear curtailed production margins. “If the demand continues to increase, there could be a further increase in the price trend,” said a local supplier.
For the Quarter Ending June 2021
The American Chlor-Alkali industry operations were seen improving after the industry suffered a setback from the polar winter storm Uri in the US gulf coast region which knocked out three fourth of the region’s chlor-alkali production. The operating rates improved to 70% in the North American region which proportionally enhanced the regional supplies in the first half of the quarter, whereas the demand outlook improved in the later half as the downstream activities picked up. Brazil, Australia, and Jamaica were the top export markets for the US Caustic Soda. It is observed that the US chlor-alkali capacity fell by 6% on m-o-m basis in May. Amidst the operational issues due to equipment failure, the Formosa Plastics facility in Westlake, Texas declared force majeure in early June. Demand is majorly focused from the water treatment and alumina production with FOB Texas pricing discussion settled at USD 320 per tonne in June.
During the second quarter of 2021, Caustic Soda supplies in the Asia Pacific region were sufficient to cater to the strong market demand as production rates were flared up in the Chinese domestic market. However, some constraints were witnessed during the May Day holidays in early May. Whereas in India, industrial and commercial activities were restricted as the country was largely impacted by the second COVID wave. Caustic demand showcased mixed sentiments in Northeast and Southeast Asian countries. Offtakes were firm from the downstream water treatment and alumina industries. The pricing trend in India observed a constant decline of 13.64% from the start of Q2 till the 2nd week of June since. Ex-Works prices in India settled at USD 442 per tonne.
With the resumption in market supplies, the European Caustic Soda supplies were seen easing with resumption in overseas supplies. Netherlands turned out to be the second largest importer of Caustic Soda with the volume totalled around 58 KT in the first four months (Jan-April) in Europe. Supply conditions in the second quarter improved in the European region as the operating rates at several plants were ramped up and the imports from the US improved in the second half of the quarter. Demand outlook in the European market remained constant from the downstream water treatment and alumina manufacturing sectors.
For the Quarter Ending March 2021
During the first quarter of 2021, Caustic Soda supplies remained disrupted as the freeze weather hit the US gulf region, resulting in shutdown of some major Chlor-alkali units in Texas such as Westlake Chemicals, Olin Corp., Oxychem and Formosa for over several weeks. The shutdown of several plants, however, did not affect the prices of Caustic Soda in the region which were assessed around USD 280/mt FOB Texas. Increased consumption from the downstream sectors significantly drove the demand of Caustic Soda in the regional market throughout the quarter.
Caustic Soda supplies remained balanced in the first quarter of 2021, as various Asian producers scheduled a maintenance turnaround, however the situation seemed to balance out as a key producer resumed its unit during the end of January. The demand was firm during the first half of the quarter ahead of Chinese Lunar New Year holidays, later due to improved consumption from the automotive and alumina industries. The Indian Caustic industry reported dampened demand, and a further hit as the government’s trading arm denied any recommendations to impose Anti-Dumping Duty (ADD) on the Chinese Caustic Soda to lend support to the downstream consumers. This left a significant room for the inflow of cheap Caustic imports in India.
The supplies of Caustic Soda in the first quarter of 2021 slumped, as the Caustic Soda market hit historically low. In the Northwest Europe prices of Caustic Soda were averaged under USD 180/MT FOB in early March. The demand however surged as the majority of Caustic Soda supply was diverted toward the manufacturing of PVC production. Overall demand however remained stable with the economy still grappling to fully recover from the effects of the pandemic during 2021.
For the Quarter Ending September 2020
The Asian Caustic Soda market bounced back in Q3 2020 after chlor-alkali rates improved on the back of greater Chlorine demand for producing PVC. Due to slowed domestic consumption, some producers in Asia turned to the export market to ease stock piling inventories. Supply chains in many downstream sectors eased with ease in travel restrictions. Alumina production rates which remained staged to 75% in Q2 showed slight improvement with resurgence in industrial activity. Production rates in other downstream sectors such as pulp and paper, textile printing, dyeing and chemical industries are also returning to norm. Players have reported strong demand from hygiene applications such as bleach and soaps since the start of the year.
The third quarter Chlor-Alkali market outlook remained pressured owing to hurt sentiments in the United States as major Chlor-Alkali producers remained shut throughout the quarter after major parts of the US were put on alert due to Hurricane Laura. Scheduled maintenance turnarounds further exacerbated the supply chain issues. Downstream pulp and paper industries operated at curtailed rates making Caustic prices slip to staggering lows as number of infections continued to surge. The demand for liquid Caustic Soda for the production of flakes has slowed significantly, as producers have been unable to supply cargoes deterred by the economic fallout from the coronavirus slowdowns.