Archive
The Advantage Newsletter — 9/8/2004
| Chlorine: | Effective Operating Rates Estimated Average Wellhead Prices |
| 2003 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| CL2EOR | 95%-- | 92%-- | 91%-- | 93%-- | 91%-- | 89%-- | 88%-- | 89%-- | 94%-- | 91%-- | 92%-- | 95%-- |
| Prices Per MMBtu | $4.36-- | $5.31-- | $6.52-- | $4.59-- | $4.84-- | $5.21-- | $4.79-- | $4.60-- | $4.46-- | $4.32-- | $4.23-- | $4.95-- |
| 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%-- | -- |
| 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-- | -- |
MARKET ANALYSIS UPDATE September 8, 2004
Once again producers have announced price increases for both chlorine and caustic soda. The following table recaps all increases since the beginning of the year:
Operating rates, as described by the table above, are at maximum capacity and supplies remain tight. It is our belief that premium grades of caustic soda were very snug going into August with diaphragm cell being balanced to manageable. This seems to have changed for the worse as various producers such as Vulcan Chemicals and Formosa Plastics experienced unexpected outages, forcing reduced rates and therefore exhausting valuable inventory at the expense of production. This inventory is difficult to make up with demand as strong as it is. European demand remains unexpectedly high as Asia once again begins to pick up after a brief slow down. With United States operating rates maxed out, it is our belief that we may see a typical downturn in seasonal Chlorine demand in the fourth quarter, further tightening caustic soda. After considerable review, most producers are forecasting a robust fourth quarter. K.A. Steel Chemicals Inc. biggest concern today is the high potential for further unplanned outages at one or more sites, further restricting already tight supplies. Most, if not all, producers are on some form of strict order control with Dow Chemical announcing formal allocation of 50% for their West Coast terminals. This announcement further restricted supplies of caustic soda throughout the Dow system across the United States. Few, if any producers invested in their Chlor-Alkali plants over the last few years. Due to the low returns of the industry these plants are now being pushed to their full capacity, with unplanned outages most certainly due to occur. It would not surprise K.A. Steel Chemicals Inc. if one or more producers announce formal allocation programs if further plant problems occur.
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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