Chlor-alkali producer Olin set to raise North American caustic soda prices
Houston — Olin, the largest global chlor-alkali producer, will raise its caustic soda prices in North America for the third time this year, according to a letter to customers that S&P Global Platts obtained Wednesday.
The letter, dated August 28, said Olin would increase off-schedule prices of both diaphragm-grade and membrane-grade caustic soda by $50/dst in the US and C$60/dmt in Canada.
Olin said its order-control program, based on 100% allocation, remains in effect, with required lead times of 72 hours for truck shipments, 14 days for rail car shipments and 30 days for barge shipments. The price increases will be effective immediately, or as contract terms permit, the letter said.
Olin and the other four US chlor-alkali producers -- Formosa Plastics, OxyChem, Shintech and Westlake Chemical -- also announced caustic soda price increases in February and May. In February, Olin, OxyChem, Shintech and Formosa each announced $85/mt price increases, while Westlake announced a $40/mt increase and followed up with another $50/mt increase. In May, the producers announced $40/dst increases for US material.
Formosa and Shintech produce only membrane-grade, which has lower levels of impurities, such as salt and iron, than diaphragm-grade. Oxy, Olin and Westlake produce both.
Olin CEO John Fischer said during the company's quarterly earnings call earlier this month that the company expected domestic caustic soda prices to increase further in the third quarter.
"Strong global and US GDP growth continues to drive key caustic soda market growth in pulp and paper, water treatment, organic and inorganic chemicals and alumina," Fishcher said. "As a result, we believe the favorable long-term global caustic soda market dynamics that have been experienced over the past two years remain in place."