SINGAPORE (ICIS)--Asia’s caustic soda<http://www.icis.com/chemicals/caustic-soda/> prices are expected to remain robust in the near term, supported by restricted supply and persistently low by-product chlorine prices, industry sources said on Thursday.
Spot prices were last assessed by ICIS at $455-460/dry metric tonne (dmt) (€359.5-363.4/dmt) FOB (free on board) NE (northeast) Asia on 11 May, hitting their highest level for 2012, after rising by $40-45/dmt from $410-420/dmt FOB NE Asia on 16 March. Several chlor-alkali producers in China are operating their plants at reduced rates to balance chlorine production in the midst of low chlorine prices and the dismal condition in the chlorine-derivatives market, leading to tight availability of caustic soda cargoes for the spot market. “We have very limited cargo to export because of our low operating rate of around 50%,” a chlor-alkali producer in China said. The average operating rate of caustic soda plants in China is estimated to be at around 60-70% at the moment, according to a trader based in China. Chinese chlor-alkali producers are expected to maintain their productions at lower levels as there is no anticipated uptick in the chlorine-derivatives segment, market sources said. Domestic chlorine prices in Shandong and Jiangsu were assessed at yuan (CNY) 50-150/tonne (CNY 7.91-23.7/tonne) EXWH (ex-warehouse) and CNY100-200/tonne EXWH, respectively, on 10 May, data from Chemease, an ICIS service in China, shows. “Buying chlorine now is cheaper than producing it,” a China-based trader said. Furthermore, demand from chlorine’s downstream markets such as polyvinyl chloride <http://www.icis.com/chemicals/polyvinyl-chloride/>, methylene chloride <http://www.icis.com/chemicals/methylene-chloride/>, chloroform and epichlorohydrin <http://www.icis.com/chemicals/epichlorohydrin/> are in a bearish state, the trader added. As a result, chlor-alkali producers raised their caustic soda offers to fetch higher prices to protect their margins, market sources said. “We cannot see any chance of caustic soda prices going down as chlorine price is still low and supply is limited because of low operating rates,” another trader said. In addition to the reduced supply from China, caustic soda producers in Taiwan and Korea are unlikely to participate actively in the spot market in the near future as they are focusing on supplies to their respective domestic markets as well as contractual commitments. Thus, China is left as the main provider of spot parcels from northeast Asia for the time being, market sources said. In Japan, producers are currently not in a position to offer spot materials amid ongoing and upcoming plant turnarounds at several chlor-alkali facilities that will last until mid-June. “We may consider exporting on a spot basis after our maintenance in the second half of June,” a producer in Japan said. Northeast Asia is a major exporter of caustic soda and has an estimated capacity of close to 39m dmt, which is almost half of the global capacity, industry sources said. China is the biggest caustic soda producer globally, with a capacity that reached 32m dmt in 2011, according to data from Chemease. Despite the bullish sentiment among suppliers, most buyers held the opinion that the high caustic soda prices are not sustainable as there is no firm fundamental that is supporting prices. “Caustic soda demand is not great so I feel that the high prices are artificial,” a buyer in southeast Asiasaid. There is no fundamental shift in demand so caustic soda prices will go down eventually when buyers start cutting back on their own production because they cannot afford to buy caustic at such high prices, another buyer in southeast Asia said. “The final product prices are not going up at all so margin is being squeezed as the caustic soda buyers are unable to pass on the higher costs to their end-users,” the buyer added. The main uses of caustic soda are in the manufacture of alumina, pulp and paper, soap and detergents, textiles as well as organic and inorganic chemical production. Other applications include water treatment, metal processing, mining and glass making. ($1 = €0.79, $1 = CNY6.32) By: Feliana Widjaja <[email protected]> On Tue, May 15, 2012 at 5:18 PM, Mohan Vajpayee <[email protected]>wrote: > But its good news for mfgr.companies. > > > On Tue, May 15, 2012 at 4:52 PM, kuku manmohan <[email protected]>wrote: > >> This means More bad news for investors in RIL >> >> >> On Tue, May 15, 2012 at 3:52 PM, RAJESH DESAI <[email protected]>wrote: >> >>> Global spot propylene costs move further south >>> >>> Spot propylene costs continued to lose noticeable ground in global >>> markets as energy and naphtha markets maintained their bearish trend during >>> the course of the past week. Consecutive decreases in upstream costs >>> combined with poor downstream demand led to expectations of further falls >>> while causing an increasing number of buyers to step out from the market. >>> >>> >>> NYMEX crude futures contracts for June delivery declined more than >>> $11/barrel since May started, with $1.81/barrel of this drop occurring >>> during the past week. Similarly, ICE June Brent crude prices fell more than >>> $8/barrel since the start of this month, while they lost around $1/barrel >>> during last week. Facing downwards pressure from the persistently bearish >>> energy complex, spot naphtha markets inevitably posted additional drops >>> over the week. In Asia, spot values plummeted $40/ton on a CFR Japan basis >>> week over week, while prices lost another $15/ton in Europe on CIF NWE >>> basis. When compared to the end of April, the most recent figures >>> represented a decrease of $90/ton in both regions. >>> >>> In Europe, despite some production cutbacks, spot propylene prices >>> plunged €120/ton on FD NWE basis during last week in tandem with relentless >>> drops in naphtha feedstock costs and muted buying interest from the >>> downstream PP market. According to market sources, naphtha supply loosened >>> as the industry focused on lower cost feedstock, propane, and due to >>> restarting refineries. Now that spot propylene prices fell by €130/ton >>> since early May, June monomer contracts in the region are expected to >>> settle lower than May levels. >>> >>> In Asia, spot propylene offers decreased by $110/ton on FOB South Korea >>> basis compared to the previous week, while the cumulative drop with respect >>> to early May reached $150/ton. Seeing steep losses in the last few weeks, >>> most buyers preferred to follow a “wait and see” policy in a bid to see a >>> clearer market scene for the coming weeks. >>> >>> In the US, spot polymer grade propylene prices recorded a sharp decrease >>> of 9 cents/lb ($198/ton) on DLVD USG basis last week in the midst of a lack >>> of healthy demand and retreating upstream costs. The recent levels >>> represent a massive fall of 15.75 cents /lb ($347/ton) with respect to the >>> end of April. In contrast to initial flat nominations for June, other >>> contract announcements for polymer grade propylene emerged with drops >>> between 3 cents/lb ($66/ton) to 10 cents/lb ($220/ton). >>> >>> >>> >>> >>> >>> -- >>> CA. Rajesh Desai >>> >>> >> >> >> -- >> Manmohan Tandan >> >> > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. 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