Chlor-Alkali Market Update – February 21, 2017

The Chlor-Alkali market has been relatively steady for the last 12 months, but there are some recent developments that are well to take note of.  These are likely to continue putting pricing pressure particularly on liquid & dry caustic soda, as well as hydrochloric acid.

 

Liquid Caustic Soda 50% (Sodium Hydroxide)

• Over the past 3-4 months, at least 3 plants in the U.S. Gulf Coast have been through significant shutdown periods, both planned & unplanned.
• Europe is progressing towards a phase-out of mercury-cell caustic/chlorine production by the end of 2017.
• Some inland Asian producers are having difficulty competing for exports, due to aging infrastructure to transport material to the coast.
• U.S. exports have increased dramatically due to increasingly attractive export prices.

 

Dry Caustic Soda Beads (Sodium Hydroxide)

• Raw material (Liquid Caustic Soda) prices are on the rise.
• U.S. producer is behind on production due to limited availability of raw material.
• Chinese New Year and limited space on ocean lines are limiting Asian supply.
• Demand for dry caustic in drilling mud is increasing due to the recent uptick in U.S. oil production, that has resulted from steady recovery in oil prices.

 

Hydrochloric (Muriatic) Acid

• Same production outages for Caustic Soda have impacted supply of chlorine for Hydrochloric Acid production.
• By-product acid supply is also impacted by recent outage in the Gulf Coast.
• Recent uptick in oil production has resulted in increased demand for Hydrochloric acid used in fracking (hydraulic fracturing)
• There has also been an increase in demand for general industrial use, as the manufacturing sector recovers.