Archive
The Advantage Newsletter — 4/12/2005
| 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 | 101%-- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Prices Per MMBtu | $5.37-- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
MARKET ANALYSIS UPDATE 10 March 2005
Chlor-Alkali producers announced another round of price increases slated for April 1, 2005. Producers announced $20 per ton for chlorine as well as $40 per dry short ton for all grades of liquid caustic soda. With operating rates being reported at 101% for both December and January it is to no ones surprise that these announcements took place. Numerous producers have scheduled plant outages for maintenance and repair throughout the first and second quarter of 2005. Producers have taken a very strict order control program to their customers in order to allow themselves to build inventories prior to these outages. Some producers have purchased incremental caustic from the spot market to assist them in making it through these outages without allocating their customer base. As inventories continue to be drawn down throughout this period of time, and demand continues strong, it is K.A. Steel Chemicals belief that the possibility of a formal allocation program during the peak demand months of the summer could be implemented by various producers. With 88% of production involving the top five producers it wouldn’t take much of an equipment failure by any major producer to throw the market into a short position. Rumors continue to abound throughout the market place of the difficulties that Oxy is having with the federal government in acquiring Vulcan’s KOH facilities. The difficulty seems to be centered on Vulcan’s Port Edwards, WI facility, with potential buyers lining up to purchase as a stand-alone facility. It is K.A. Steel Chemicals belief that this acquisition will eventually be made with slight changes centered on the KOH production. To date there are very few capacity expansions announced with far more emphasis being made on further potential rationalization. Imports to the eastern seaboard seem scarce as freight from Europe has increased substantially and issues with the currency valuations continue to persist. It is K.A. Steel Chemicals belief that spot parcels will continue to hit the eastern seaboard, but the bulk of the requirement will continue to be supplied from domestic production out of the gulf.
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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