US-based chlor-alkali producer Olin sees slower demand growth in 2024: CEO

US-based chemical producer Olin reported that the expected improvement in demand for its chlor-alkali and vinyls products is progressing slower than expected this year, President and CEO Ken Lane said July 25 on the company's second-quarter 2024 earnings release.

As the world's largest chlor-alkali producer, Olin has a significant impact on the supply dynamics of caustic soda, ethylene dichloride, and vinyl chloride monomer.

Platts, part of S&P Global Commodity Insights, last assessed spot export caustic soda at $350/dmt FOB USGC July 23, stable on the week.

US spot export EDC was last assessed at $240/mt FOB USG July 23, stable on the week, and US spot export VCM was last assessed at $550/mt FOB USG July 23, also stable on the week

"Our chlor-alkali products and vinyls business benefited from seasonal demand improvement in the second quarter," Lane said. "Before considering the effects of Hurricane Beryl, we had anticipated our Chemical businesses' Q3 2024 adjusted EBITDA would have been comparable to Q2 2024."

The company declared force majeure on chlor-alkali and vinyls production and aromatics shipments at its Freeport, Texas, facility, following Hurricane Beryl, a company statement said July 10.

"Olin has safely returned many Freeport plants to operation" Lane said. "Wind damage to ancillary equipment has prevented the remainder from resuming production. Once this critical equipment is restored, those remaining assets, including our vinyl chloride monomer and phenol/acetone plants, will be restarted."

The company estimates that their Q3 2024 adjusted EBITDA will be reduced by about $100 million due to issues associated with the storm.

The company's chlor-alkali and vinyls products sales in the quarter were $920.3 million, compared with $1,002.3 million in Q2 2023. Lower caustic soda pricing, and maintenance and operating issues with the vinyl chloride monomer plant at the Freeport, Texas, facility have negatively impacted sales.

Olin reported net income of $74.2 million in the quarter, down from the $146.9 million net income in Q2 2023. Sales were $1,644 million in the quarter, compared with $1,702.7 million in Q2 2023.