Strong Demand and Reduced Capacity Caused Drop in Caustic Soda Inventories
Western European caustic soda stocks dropped dramatically during September. After a vacation-inspired rise of 7.5% in August to 287,900 tonnes, inventories fell 15% (42,000 tonnes) the following month to 245,522 tonnes. This was due to a combination of high demand and scheduled maintenance. Since the beginning of the year, caustic soda stocks have declined 140,208 tonnes and are now the lowest in four years despite production being 200,000 tonnes stronger than the same period in 2003.
Marc Moehlig (chairman of the Euro Chlor Statistics Committee) told this year's European Petrochemical Association conference in Monaco that the tight market situation for caustic soda was expected to continue until at least the end of the first quarter next year. He added that the shortage could continue throughout 2005 if the economy continued at a good level since there had been no major investments in the chlor-alkali sector and only two relatively minor plant expansions were expected on stream next year. Demand for caustic soda during the third quarter was 4.4% higher than in the same period of 2003. In 2004 year to date, demand has been 307,000 tonnes stronger than 2003.
Even with average monthly production increasing year on year, average monthly stocks are significantly lower than any year since 2000. With strong production and high capacity utilisation rates both in Europe and the USA to meet continuing high market demand, there is currently no scope for stock building. Shortterm production decreases due to cracker problems in The Netherlands and France are only likely to exacerbate the situation.
As with caustic soda, the various plant maintenance shutdowns resulted in Western European production of co-product chlorine declining 6.2% during September from 817,251 tonnes (August) to 766,187 tonnes. This compared with 775,304 tonnes in the same month last year. Daily chlorine production (25,540 tonnes) in September was 3.12% lower than the previous month (26,363 tonnes) with the capacity utilisation rate for September at 81.6% compared with 84.2% the previous month.
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