RE:RE:caustic sodaKherson wrote: carp1104 wrote: Has anyone on this bullboard noticed that the price of Caustic Soda has been very high this quater and shows no sign of dropping, that should make for a great quarter!! Also the exchange rate is also better. Just two reasons why Chemtrade is cheap at thes prices.
Actually, the increase in the Caustic Soda price has already been factored into Chemtrade's Updated Guidance in it's most recent Investor Presentation under the Appendix section.
Good try though...
Kherson
Really? How did they know that in June there would be these production problems causing prices to go even higher? Did they lay out a plan for some sort of corporate sabotage in the Q1 report? Fortune teller?
The revised guidance was for an average price of $575. Current price is $800. A 13 year high.
From the Q1 conference call:
Notably, we now forecast that the average Northeast Asia spot price for caustic soda that will be a key determinant for realized selling price in '22 will be US$575 per ton, which is US$285 per ton higher than in '21. This is US$135 per ton higher than our previous assumption.
The average index value used for the first half of '22 was US$660 per ton, implies an average value of US$485 per ton for the second half of '22.
Nice try though.
Westlake declared force majeure on chlorine and all grades of caustic soda throughout its US system, according to a June 15 customer letter seen by S&P Global Commodity Insights.
Westlake's chlor-alkali production "has been directly and adversely impacted due to the sudden and unanticipated failures of critical processing equipment," the company said in its letter. "These equipment failures have disrupted the manufacturing process thereby resulting in limited availability of chlorine and caustic to our customer."
Westlake did not specify sites affected by equipment failures.
However, sources familiar with Westlake operations said the company's chlor-alkali unit in Natrium, West Virginia, has experienced equipment issues since concluding a recent turnaround and was operating at reduced rates; the company has faced brine quality issues from a third-party provider at its Geismar, Louisiana, chlor-alkali unit; and it has launched a complex-wide turnaround at its Plaquemine, Louisiana, site, including the chlor-alkali facility.
Westlake did not immediately respond to a request for comment.
Westlake's Natrium facility can produce up to 300,000 mt/year of chlorine and 330,000 mt/year of caustic soda. The Geismar site can produce up to 317,514 mt/year of chlorine and 349,266 mt/year of caustic soda, and the Plaquemine unit can produce up to 426,376 mt/year of chlorine and 453,592 mt/year of caustic soda.
Olin also reducing chlor-alkali output
Westlake's announcement came a day after Olin, the world's largest chlor-alkali producer, announced plans to temporarily curtail a "significant portion" of its ethylene dichloride and related chlor-alkali production at its Freeport, Texas, complex.
Olin cited the resumption of chlor-alkali production at its Plaquemine complex after nearly two months; high electrical power costs in Texas; and poor quality EDC market conditions as the reasons for reducing output at Freeport.
Olin on April 20 declared force majeure on chlor-alkali, EDC and other products throughout its US system, which remained in effect June 15. The declaration came two days after a compressor caught fire and a chlorine leak occurred at the company's Plaquemine chlor-alkali facility, which can produce up to 970,000 mt/year of chlorine and 1 million mt/year of caustic soda.
Olin said June 14 that it had restarted that chlor-alkali unit, and expected to bring the rest of its Plaquemine complex back online by August.
Olin's Freeport complex also is continuing to run at reduced rates with two of six power units shut since February. The company said June 14 that a portion of that power capacity would resume operations in Q4 2022.
Olin's Freeport chlor-alkali unit can produce up to 2.7 million mt/year of chlorine and 3 million mt/year of caustic soda.
Market sources said Westlake's issues on top of Olin's would further tighten chlorine and caustic soda availability. Spot export caustic soda market activity has been thin in recent weeks as producers focused on contractual obligations.
Spot export caustic soda prices were last assessed June 14 at $800/mt FOB USG, a 13-year high.