Although the U.S. economy is improving, it is difficult for chlor-alkali producers to stretch their brows. Recently, at the 2012 International Petrochemical Conference held in San Antonio, Texas, the industry expressed concern about the market situation in the coming months: on the one hand, market supply may be affected by accidental or planned shutdowns; on the other hand, The demand of downstream users is still poor, and several price increases in the first quarter have been opposed by users. The unstable supply and demand relationship makes the chlor-alkali industry unforeseen.
In the first quarter of this year, the downstream demand for chlor-alkali was weak, and several product price increases were met with opposition from downstream users. At the meeting, industry sources said that despite the good situation of the United States exports of polyvinyl chloride (PVC), but the demand for domestic PVC will continue to slump. Real estate is the main downstream industry of PVC. In late March, the American Association of Realtors (NAR) reported that the sales rate of US home sales fell by 0.5% in the first two months of this year. Some PVC manufacturers announced a 3 cents per pound product increase in March and many consumers opposed it.
Not only that, the caustic soda experience is also very similar. The demand for caustic soda from the bulk customers in the downstream alumina industry is also decreasing. Alcoa announced that it will reduce its annual alumina production capacity by 390,000 tons in April. In fact, as early as January of this year, the company announced the reduction of smelting capacity of 531,000 tons in factories in Tennessee and Texas, and in European factories in Italy and Spain. Other alumina producers also said that they began to cut production due to reduced demand for their products. In late February and early March, some caustic soda producers in the United States openly stated that they will raise the price of dry short tons (DST) of caustic soda by US$45 every year. They will take effect on April 1, but they have met with strong opposition from some downstream users.
In fact, at present, there is also a difference between the prices of caustic soda and alumina companies in the US Gulf caustic soda market. With the increase in the supply of caustic soda, the difference will also increase. An alumina producer said that the buyer is currently submitting caustic soda to the US Gulf at US$380/dmt, while the caustic soda distributor is quoting at US$420 to 445/dmt, which will bring pressure on the price reduction of caustic soda. Sources said that caustic soda sellers are aware of the relatively large number of buyers in the alumina market, and the turnover is relatively large, so they are willing to use a similar way to reduce prices, so as to balance the supply and demand on the domestic market, but the price cuts Not a long-term solution.
At the same time, the supply of chlor-alkali products may tighten. At around 8 o'clock on March 22, the Westlake Chemical Company's factory producing vinyl chloride monomer in Louisiana in the US exploded and caused a fire. The equipment was severely damaged, which affected the market supply of PVC. Japan's Tosoh, the downstream producer of chlorine, has also decided to postpone the start-up of the production of VCM equipment to the end of April, which may affect the PVC supply in some parts of the world in the second quarter.
In addition, during the international petrochemicals conference, the American manufacturer Dow Chemical announced to increase the price of dry caustic soda by 50 US dollars per dry ton, effective from May 1st or the time allowed by the contract. The Dow representative publicly stated: “In all its consumer groups, strong demand has been demonstrated. After destocking in the fourth quarter of 2011 and early 2012, Dow announced the sale of caustic soda in March. In the second quarter, caustic soda supply will tighten with planned overhaul of some chlor-alkali production facilities. One industry source stated that Dow's decision may be that it will cut production in the second quarter. A signal.
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