Chlor-alkali
The situation in the caustic soda market remains one of
balanced-to-tight supply, with producers on strict order control. Caustic demand
is strong, and cases of shortages, even for diaphragm grade product, have been
reported. A major producer says the typical slowdown in volumes following the
implementation of a large increase did not happen in July, resulting in orders
being higher than expected. Inventories continue to fall, says the producer.
Membrane grade material continues to be tight, with no relief expected in the
near term, producers say. Certain producers have noted a pickup in buying
interest, potentially due to the acknowledgement that prices will rise by
October, they say. There were, however, no add - tional volumes, they add.
Imports on both east and west coasts of the U.S. remain restricted by tight
supply in Asia and a pickup in demand in Europe, keeping the market snug. There
were reports of a production cutback at Formosa PlasticAfs chlor-alkali plant at
Point Comfort, TX due to an unplanned outage at the vinyl chloride monomer (VCM)
unit at the same site. Formosa says it is evaluating the cause of the outage,
and anticipates the VCM unit to be down for onetwo weeks. The company says it
plans to ramp up production at its chlor-alkali unit imminently. The production
cutback will have significant impact on a market that is delicately balanced,
sources say. Formosa is still supplying its customers via swap arrangements, the
company says. Export prices, meanwhile, firmed about $20/m.t. from last month on
the back of robust demand in international markets, sources say. Trade was thin,
however, due to limited supply, they say. Chlorine demand remains strong and
supply tight. Most producers say they have not detected any slowdown in demand
to date, and some are still running backlogs on shipments.
Soda Ash
Soda ash exports from China for the first half of the year
turned out to be higher than projected, as Chinese producers run their plants at
high rates even with a jump in costs, market players say. Tight supply of coal,
a major energy source in China, as well as high prices of salt feedstock prices
have driven up production costs in China by $20-$25/m.t. from last year | 
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