asia

Asia's caustic soda market to remain well-supplied into December


SINGAPORE (ICIS)–Asia’s caustic soda market is
expected to remain well-supplied into December
amid sluggish demand and global economic
slowdown.

Supply has been ample since late June, when
India – the world’s largest PVC import market –
removed
anti-dumping duties on PVC cargoes of all
origins except China and the US.

Integrated producers in northeast Asia except
China subsequently pushed chlor-alkali run
rates rates to feed co-product chlorine into
the production of polyvinyl chloride (PVC).

But, on the other hand, since the electrolysis
of brine produces caustic soda and chlorine in
a fixed 1.1:1 ratio, the influx of caustic soda
supply soon outstripped demand in Asia.

Moving into December, spot supply of liquid
caustic soda is expected to remain healthy
despite some northeast Asian producers
lowering
run rates amid squeezed
chlor-alkali margins and higher power costs in
winter.

Many market participants also noted that demand
continues to be affected by
pessimistic
conditions in the global
economy.

Caustic soda is used in the manufacture of pulp
and paper products, alumina, soap, water
treatment and textiles, while PVC sees
different end-usage in applications such as
pipes and profiles, in the automobile industry
and for medical devices.

In the week ended 22 November, average spot
prices for liquid caustic soda fell $15/dmt
(dry metric tonne) FOB (freight on board) NE
(northeast) Asia to an eight-week low of
$265/dmt FOB NE Asia.



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