For the Quarter Ending June 2021
Chlorine prices increased effectively due to critical shortage of the material heard across USA during this quarter. The impact of hurricane Laura observed in North America could be still felt as a major fire which disrupted production at Biolab Louisiana plant in 2020 remained disrupted during this quarter too. This plant holds the capacity of around 1.26 million Mt/year of Chlorine which is widely utilised for making chlor-alkali products, disinfectants and vinyl chloride monomers (VCM). The unprecedented fire created a prolonged shortage of Chlorine in the country, which translated into marked gains in the regional prices of disinfectant tablets used for swimming pools in the USA. The quarter also noted Biolab’s plan to establish another plant in USA for Chlorine, however, any official announcement is yet to come from the company.
The Asian market reported firm sentiments for Liquid Chlorine during this period, backed by firm offtakes from the downstream sectors like PVC and agrochemicals. In China, offtakes from the downstream PVC manufacturers remained abundant throughout the quarter, while the inventory levels were ample enough to satisfy the overall demand in the country. The agrochemical sector was also booming in the meantime, which also supported the overall Chlorine market of the country. While in India, Chlorine prices traced upward trajectory during this quarter backed by consistently high offtakes from the agrochemicals segment, while demand remained robust from the PVC segment. The price of Liquid Chlorine was assessed as USD 80/MT in India during the month of May.
The European Chlorine market witnessed firm demand from the downstream sectors during Q2 2021. The demand from the agrochemicals sector remained high throughout the quarter, due to seasonal demand from end users. While PVC manufacturers also increased their offtakes due to low and expensive shipments from the global market. In addition, the regional demand from disinfectant segment also remained modest to firm in the meantime. The overall market trend for Chlorine remained up in Europe during Q2 2021 buoyed by strong gains seen across the key producing countries.
For the Quarter Ending March 2021
Key manufacturers of Chlorine stated that they had orderly price improvements for bulk Chlorine from downstream sectors during this quarter. Demand from downstream disinfectants segment rose successively month over month. However, freakish weather reduced the several plants output that reduced the demand for liquid Chlorine from industrial chemical segment like Pulp and Paper, PVC, Textiles etc. though the demand from Pharmaceutical segment remained consistently firm throughout the quarter. In addition, several major plants faced force majeure under unfavourable climate conditions, like Westlake, Olin and OxyChem all of them announced FM on their Chlorine plant across Gulf of USA. Firm demand and inadequate supply drove the prices to gain value during the quarter ending March.
The Asian market showed mixed sentiments for Liquid Chlorine from several downstream sectors, while the supply fluctuated in different segments affecting the prices. After lunar holidays in China, some downstream users claimed having shortage of Chlorine gas, and gained a significant number in its value in this segment. While in the Indian markets, sufficient availability due to ample by-product Caustic Soda production and lower demand pressured the value of Liquid Chlorine in the country. In the Indian and Chinese markets, prices of Liquid Chlorine reduced and reached USD 202.3/MT and USD 211/MT respectively during March.
The European market encountered a healthy demand from the domestic disinfectant sector during this quarter. Consumption of Chlorine in Europe showed increment on y-o-y basis, however the production also showed sufficient improvement to satisfy this demand. Imports from USA remained halted due to major plant turnarounds. In addition, curtailed production in major Middle Eastern plants also reduced the supply activity of the region. Overall. the regional Liquid chlorine prices showed marginal improvement compared to the last quarter.
For the Quarter Ending September 2020
As COVID-19 restrictions were eased across major Asian economies, a number of Chlor-Alkali producers reported operations reversing to normal in the third quarter. Buoyed by improvement in the offtakes by several Chlorine derivative manufacturers, a much-needed bounce back in the third quarter results pushed Chlor-Alkali producers to proceed with their scheduled forward integration plans in the Chlorine-Caustic supply chain. An Indian Chlor-Alkali giant reported a double-digit EBITDA growth in Q3 as demand for chlorine value-added products remained upbeat during the quarter, driven by rising consumption from healthcare and hygiene, drinking water and other industrial segments. Easing Caustic demand, however kept the output low causing industrial grade liquid Chlorine to remain rangebound within USD 200-260 per MT CFR Southeast Asia.
Chlorine demand rose after witnessing a massive fall in Q2 as demand from the downstream PVC producers picked-up after a sharp rebound was observed in the construction activity later in Q3. With Chlor-Alkali operations settling at above 80% rates as lockdowns eased, traders could observe more intense buying for Chlorine derivatives despite hovering fears of second coronavirus wave in several European states. While prospects for Chlorine remained strong, market players were seen sort of finding a mid-way to strike out balance between PVC and Caustic as sales of the latter was still under pressure.
The North American Chlorine industry remained subjected to acute volatility during the third quarter with supply largely deterred from outages caused due to high winds as a result of Hurricane Laura and a series of regional storms thereafter. Chlor-Alkali Production rates were held at about average levels in the first half of the quarter amid softening demand for the by-product Caustic Soda lye. Constrained Chlor-Alkali rates and a lack of Chlorine feedstock for PVC production further triggered potential shortage in the PVC export volumes among some US producers. The demand, however, gathered uptrend later after a sharp pick-up in enquiries for Chlorine derivatives such as EDC (ethylene dichloride), VCM (vinyl chloride monomer) and PVC (polyvinyl chloride) was observed. A leading manufacturer reported shipment of some railcar Chlorine at the highest price since 2003 during the third quarter.