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NewsSSESSMENTS: Olin Adjusts US Caustic Soda Price For Third Time In 2020

Author: SSESSMENTS

Market participants in North America told SSESSMENTS.COM that the world's largest chlor-alkali producer Olin had notified its customers about a price increase for both spot and contract prices of US caustic soda by $80/dry short ton (DST) and by $125/dry metric ton (DMT) in Canada. This latest hike marks the third increment in the US so far in 2020 and will be applied on top of a $60/DST hike announced in March.

All five US chlor-alkali producers increased prices by $30-$40/DST in February, followed by an additional hike of $60-$70/DST in March announced by most of them. Market players informed SSESSMENTS.COM that the February increment had mostly been implemented, with buyers starting to accept the March increases. However, they noted that it might need 90 days for the full increases to show up in contracts.

According to the latest industry data, operating rates at US chlor-alkali plants increased from 86% in February to 90% in March. However, it is expected to fall to 70%-80% this month due to plunging demand for chlorine and its derivatives. Caustic soda is a byproduct of chlorine manufacturing, and reduced chlorine production will lead to a tightened supply of caustic soda, which pushes prices upwards.

Supply tightness also lends support to export caustic soda prices. Export prices settled at $355-$365/DMT FOB USG on Tuesday, $120/DMT higher than a week earlier. Done deals were heard around $360-$365/DMT FOB on shipments to Latin America, compared to $270-$305/DMT FOB last week. Meanwhile, offers were heard at $400/DMT FOB, but no confirmed deals concluded at that level.

Tags: Americas,Canada,Caustic Soda,Chlor Alkali,English,News,PVC,US

Published on April 29, 2020 12:52 PM (GMT+8)
Last Updated on April 29, 2020 6:16 PM (GMT+8)