Archive
The Advantage Newsletter — 10/3/2005
| Chlorine: | Effective Operating Rates Estimated Average Wellhead Prices |
| 2004 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| CL2EOR | 96%-- | 97%-- | 100%-- | 101%-- | 100%-- | 102%-- | 99%-- | 100%-- | 102%-- | 97%-- | 100%-- | 101%-- |
| Prices Per MMBtu | $5.38-- | $5.01-- | $4.83-- | $5.06-- | $5.48-- | $5.69-- | $5.45-- | $5.21-- | $4.73-- | $5.30-- | $5.91-- | $6.08-- |
| 2005 | Jan | Feb | Mar | Apr | May | June | Jul | Aug | Sept | Oct | Nov | Dec |
| CL2EOR | 99%-- | 101%-- | 96%-- | 93%-- | 91%-- | 91%-- | 91%-- | -- | -- | -- | -- | -- |
| Prices Per MMBtu | $5.37-- | $5.44-- | $5.82-- | $6.27-- | $5.86-- | $5.99-- | $6.51-- | $7.48-- | -- | -- | -- | -- |
MARKET ANALYSIS UPDATE October 3, 2005
The following is K.A. Steel Chemicals’ assessment of the effects of Hurricane Katrina and Hurricane Rita on Gulf coast production of both chlorine and caustic soda. Currently Dow Chemical, the largest U.S producer, is on strict 100% order control, although their Plaquemine, LA facility as well as their Freeport, TX facility are running at reduced rates. Oxy currently is running their Taft, LA facility as well as their Geismar, LA facility at 50% production rates. PPG has announced force majeure on their North American chlor-alkali facilities. Their Lake Charles, LA facility is currently down and not expected to be running at significant rates for a few weeks. Their Natrium, WV facility is still currently on strike and running at less than capacity. It is reported that Olin’s Macintoch, AL facility is running at minimal rates primarily because of their large vinyl customer being down due to the hurricanes. Georgia Gulf has declared force majeure and has implemented an allocation program of 50%. Pioneer’s St. Gabriel, LA facility is reported to be down with mechanical problems. Formosa Plastics is estimated to be running their Point Comfort, TX facility at 75% capacity. It is estimated that these production losses equate to 30-40% of production capacity. Most of these production facilities are at reduced rates or not producing at all due to the lack of natural gas, ethylene, brine, or in many cases pipeline customers who are still down primarily due to the lack of raw materials. Once natural gas is restored, pipeline chlorine customers can begin production and therefore the flow of chlorine can resume to these facilities; until then many chlor-alkali producers can only run their production based on availability of empty chlorine rail cars. Inventory of caustic soda in the Gulf was depleted during Hurricane Katrina while waiting for the startup of the chlor-alkali facilities. Inventory after Hurricane Rita is for the most part nonexistent with orders being filled from production. It is K.A. Steel Chemical’s concern that with up to 40% of production currently being curtailed and inventory from producers substantially depleted, how will replenishment of inventory in the Midwest take place without product dislocation and stock outs taking place. K.A. Steel Chemicals’ elaborate infrastructure of two barge tanks in Pittsburgh, PA, two barge tanks in Cincinnati, OH, one barge tank in Guntersville, AL, two barge tanks in St. Louis, MO, one barge tank in Port of Catoosa, OK, seven barge tanks in Chicago, IL, one barge tank in Muscatine, IA and two barge tanks in St. Paul, MN total 18 barge tanks for the river system which can be fed from our Eastern Seaboard, deep sea tanks, which are fed primarily by domestic and European supply. A deep-sea tank in Searsport, ME, two in Baltimore, MD and two in Savannah, GA can feed by tank truck and rail to our infrastructure in the Midwest. Our caustic soda suppliers such as Dow, PPG, Oxy, Olin, Formosa, Pioneer as well as European producers feed this infrastructure. With a combination of storage and contract supply K.A. Steel Chemicals is positioned to supply our customers 100% of their historical draw.
The K.A. Steel ADVANTAGE offers insight into current trends and essential market analysis allowing you to make insightful, well-timed purchasing decisions. With K. A. Steel, customers have the benefit of knowing what K. A. Steel knows. Our customers receive timely coverage of trends in the industry as quickly as the information emerges.
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- 09/16/08 - CMAI Hurricane Update
- 09/03/08 - Market Update after Hurricane Gustav
- 06/12/08 - Flooding Threat Continues in Midwest
- 06/05/08 - Dow Declares Force Majeure
- 2008 NPRA Report
- 04/01/08: $80 INCREASE ANNOUNCED
- US Caustic Market Tight
- Shintech Applies for Permits for New VCM Facility
- KAS Announces New Chlor-Alkali Plant
