25 Feb 2020 | 15:23 UTC — Houston

Shintech announces $35/dst caustic soda price increase

Houston — Shintech has announced a $35/dst price increase for caustic soda, according to a source familiar with the company's operations.

Shintech on Monday was the last of the five US chlor-alkali producers to announce such a price increase this month for caustic soda -- a key feedstock for alumina and pulp and paper industries, as well as soaps and detergents.

Olin, Westlake Chemical, OxyChem and Formosa Plastics USA had already announced price increases ranging from $30-$40/dst, according to customer letters seen by S&P Global Platts, and all were effective immediately or as contract terms permit.

If accepted, such price increases can take up to 90 days to show up in contract renewals.

Shintech's February announcement was a restatement of its December announcement of a $70/dst caustic soda price increase that was not accepted in full, the source familiar with company operations said. A restatement effectively replaces a prior price increase announcement.

Shintech was not available for comment.

Caustic soda prices have been under pressure globally as economic slowdowns in China and Europe and more widespread industrial slowdowns siphoned demand in key sectors.

US export caustic soda prices were last assessed February 18 at $215/mt FOB USG after hovering at $200/mt FOB since December 10, but remained at levels not seen since June 2010 as industrial activity crawled back from the lows of the global financial crisis that emerged in 2008.

However, market sources were skeptical that the latest price increases would be accepted in full. In November, several producers announced price increases of $80-$85/dst, but sources said those increases were rejected.

Most producers announced price increases for domestic caustic soda in August and September 2019 in a $30-$45/dst range, but the market rejected those as well, according to sources. That rejection came after the market accepted less than half of US increases ranging from $60-$90/dst announced last May and June.