U.S. Sodium Hydroxide Flows Into South America

June 4, 2019

U.S. exports of Sodium Hydroxide to Brazil have just increased exponentially. The crumbling Pinheiro neighborhood, and the world’s largest alumina refinery, are the reason why.

Petrochemical producer Braskem in Brazil has recently shut down salt mining operations following a governmental report citing the salt mines, combined with heavy rainfall, to be the cause of geological instability in the Pinheiro neighborhood.

Because salt is necessary for the production of Sodium Hydroxide, Braskem has subsequently declared force majeure and has begun importing product from the U.S. to fulfill contracts.

Another company in Brazil, aluminum producer Norsk Hydro, has begun importing a significant amount of additional Sodium Hydroxide from the U.S. A government-issued production embargo issued due to environmental concerns has recently been lifted. The Alunorte alumina refinery is allowed to run at full capacity after over a year of only being allowed to run at half capacity. Alumina production is one of the biggest consumers of Sodium Hydroxide in the world.

These additional significant exports to South America, combined with additional exports to Latin America, the Middle East and Asia (due to new alumina operations) are squeezing U.S. Sodium Hydroxide inventories. Domestic demand for Sodium Hydroxide is increasing as well. Meanwhile, several major U.S. producers have planned outages in the near future.

As a result of the shifts in the market, U.S. producers have announced increases. According to market prognosticators, there is a possibility that a portion of the increases could materialize in the third quarter. With questions about how this could affect you, reach out to your sales representative.