Chlor-alkali industry in North America is getting better

According to the latest research report from Fitch Ratings International, benefiting from the slow recovery of the end-user market, the chlor-alkali market in North America will grow at an average annual rate of 2% to 3% by 2012. By 2012, market demand will reach About 11.5 million tons. The report also pointed out that if it can strengthen exports to emerging markets, North American chlor-alkali production will grow faster.
Fitch International stated that the US chlor-alkali market had already emerged from the predicament of the need to reduce inventory and demand collapse at the beginning of 2009, but this recovery was still slow and production was below the level before the economic downturn. Fitch's international analyst Thomas Dohrmann pointed out: "In the first half of 2010, the chlorine output of the US market climbed from 4.5 million tons in the same period of 2009 to 5.5 million tons, but it is still lower than the 580 in the first half of 2008. 10,000 tons.” Due to the economic downturn, North American production of chlorine dropped 12% last year to 8.5 million tons, and caustic soda production fell 11% to 6.6 million tons.
At the same time, the price of chlor-alkali products rose sharply due to economic recovery and improved market demand. Analysts said that since the beginning of this year, producers have implemented several rounds of price increases. The price of caustic soda has risen by about US$200/ton, which is 82% higher than the price at the beginning of the year. The price of chlorine has also stabilized at US$290 to US$320/ton. . In particular, since September of this year, chlor-alkali producers in the United States have raised the price of caustic soda three times, which was raised by about US$30/ton in September, and increased by US$30/ton in October. 50 US dollars / ton.
Fitch International stated that the US chlor-alkali industry’s plant operating rate has reached 93% of the highest level after the financial crisis in August and is expected to remain at a high of 80% to 85% in 2011. The stable export to emerging markets will help To maintain the output of the US chlor-alkali industry. In addition, Dorman said: “In North America, some major end markets for chlor-alkali products will continue to rebound, which will further consolidate the market base for chlor-alkali products.”
The recently announced third quarter industry report showed that US chlor-alkali producers increased sales and earnings in the third quarter due to rising prices and strong demand. North America’s third-largest chlor-alkali producer, Olin, reported that sales of chlor-alkali increased by 20% year-on-year to US$275.3 million in the third quarter, and sales of chlorine, caustic soda and its derivatives increased by 7% year-on-year. Olin's operating rate for the third quarter averaged 91%, the highest level since 2007. PPG's third quarter chlor-alkali business before interest (EBIT) reached 60 million US dollars, in the third quarter of 2009 profit of 41 million US dollars in the second quarter of 2010 to 53.1 million US dollars. PPG said that the increase in revenue for the chlor-alkali business in the third quarter was mainly due to higher prices of caustic soda and chlorine, as well as higher operating rates. As of 2009, Olin's chlor-alkali capacity in North America was 1.96 million tons/year, second only to Dow Chemical's 3.9 million tons/year and Oxy-Chem's 340 tons/year, ranking fourth for PPG Industries, 1.85 million tons. /year.

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