Archive
The Advantage Newsletter — 11/6/2003
| 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%-- | -- | -- | -- |
| Prices Per MMBtu | $4.36-- | $5.31-- | $6.52-- | $4.59-- | $4.84-- | $5.21-- | $4.79-- | $4.60-- | $4.46-- | $4.32-- | -- | -- |
MARKET ANALYSIS UPDATE November 6, 2003
With the failure of the October increase, caustic soda softened this past month. Ironically, many of the larger producers of caustic soda such as Dow, PPG, Formosa and Olin seemed to be more balanced, to possibly short, in inventory. At least one of these producers has gone to the spot market to supplement their existing inventory. Spot caustic soda has increased by a minimum of $15 per dry short ton over the course of the month. Chlorine operating rates for the month of September took a 5% increase over the previous month, which reflect in part the strong showing in GDP for the third quarter. Typically, chlorine represents 2/3 of GDP. If this rate is sustainable throughout the fourth quarter, caustic will continue to soften and we may see a strong case for a January 1st chlorine increase. It is K.A. Steel Chemical’s belief that caustic will continue to soften well into the first quarter and possibly the second before a potential turnaround where caustic soda demand catches up to supply. Imports into the U.S. to date are up by approximately 35-40% compared to last year at this time. Strangely enough, exports from the U.S. are also up by approximately 40% during that same time period. Rumors continue to abound pertaining to Vulcan Materials Chemical Division being spun off to potential competitors such as Oxy and Georgia Gulf. With Oxy, it is K.A. Steel’s belief the industry would see rationalization of a plant or two. With Georgia Gulf, it is K.A. Steel’s belief that Vulcan’s merchant chlorine would be pulled from the merchant market to feed Georgia Gulf’s internal appetite for chlorine. Although this is all speculation, it would have a profound impact on the industry, as well as the forecast for 2004, if these rumors become a reality.
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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