Archive
The Advantage Newsletter — 7/1/2004
| 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 July 1, 2004
July 1, 2004 Please take special note that the Chlorine Institute has revised the new chlorine operating rates since January 2004. The new rates are significantly higher and posted above. The first half of 2004 concludes on a very positive upswing for U.S. chlor-alkali producers as (CL2) is now at historical highs in price, contractually $260.00 - $275.00 per short ton. Spot rail-cars are apparently quoted toward the $300 per short ton range. Demand for chlorine into vinyl derivatives remains strong. Operating rates for chlor-alkali producers are at maximum limits, with the last rate provided by the Chlorine Institute for April at 99%. Producers remain very steadfast in full implantation of the July 1st caustic soda price increase of an additional $45 per dry short ton, on top of the June 1st increases of $50/$60/$70 per dry short ton. The market appears to be very balanced for diaphragm grade to a truly 'snug-tight' supply for membrane grade. Spot pricing for all grades of product has been increasing for the past month and a half as 'order control' programs remain in place. Domestic producers have been able to gain leverage on price increases due to several variables. First, import volumes to West and East coast have decreased for the first four months of 2004. West cost pricing, fob ex-tank, remains the highest in the United States. Second, demand for all grades of product has increased during the 2nd quarter and is forecasted to remain this way for the remainder of 2004 and well into 2005. In fact, it is important to note that if chlorine production decreases as a result PVC demand, weakening at all in the 3rd quarter, the end result will be simply be less NaOH 50% produced. Rates can not move higher today. While cost structures for chlor-alkali producers remain much higher than historical averages, the ECU is set to move above $400/unit as the 3rd quarter unfolds. Georgia Gulf, Formosa and Olin have all delayed scheduled maintenance turnarounds. With very solid demand for both the molecules and bleach, the facilities will wait to perform the work. Alumina caustic soda pricing sold with six month firm pricing decreased by $18 per dry short ton beginning 3rd quarter. This is not unusual as this industry was paying $132/dry metric for first half 2004, or about $60 per dry short ton higher then the market average for the first half.
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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