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US January-April caustic soda exports down nearly 2.4% on year: ITC

Highlights

Decline reflects fallout from February deep freeze

January-April caustic soda imports up 8.2% on year

US caustic soda exports in the first four months of 2021 declined nearly 2.4% compared with January-April 2020, reflecting continued fallout from production shutdowns forced by a deep freeze that hit the US Gulf Coast and much of the US in mid-February, according US International Trade Commission data released June 9.

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The US shipped out 1.878 million mt of caustic soda in the January-April period, down from 1.92 million mt in the year-ago span, the data showed.

US chlor-alkali rates plunged to 59% in February, from 83% in January, when sustained subfreezing temperatures forced widespread petrochemical plant shutdowns, according to industry statistics. Caustic soda supply had been seen long before the freeze, but sudden shutdowns tightened supply.

After the freeze, caustic soda demand that had been sluggish since mid-2019 began rebounding as buyers sought to boost low inventories and growth in US COVID-19 vaccination rates spurred more economic activity.

Demand for printing paper, napkins, pint-sized milk cartons and other products made with caustic soda plunged in April 2020 when schools and offices closed, sending workers and students to work and learn from home.

US chlor-alkali rates fell to 68% in April 2020 from 90% in March that year, and remained in the low to mid 70% range from May through October. Rates surpassed 80% in November 2020 and stayed in the low 80% range until the freeze hit.

March chlor-alkali rates rose to 71% from February's 59%, and again to 80% in April, industry statistics show.

Caustic soda is a key feedstock for alumina and pulp and paper industries, as well as soaps and detergents.

Brazil is the top export market for US caustic soda, having received more than 1 million mt, or 53.6%, of 1.878 million mt shipped out in the January-April period of 2021, the ITC data showed. Australia and Jamaica came in second and third with 261,103 mt and 123,778 mt, respectively.

Brazil is a major pulp and paper and alumina producer, and Australia and Jamaica each are substantial alumina markets.

Caustic soda imports see bump

While US caustic soda exports fell slightly year on year, imports rose 8.2% to 331,297 mt from 306,027 mt in January-April 2020, the ITC data showed.

Caustic soda buyers on the US West and East coasts routinely receive caustic soda imports from Asia and Europe, respectively, if prices and freight rates are favorable. Market sources said the sudden tightness of US caustic soda supply could have prompted buyers to seek more inflows.

The top caustic soda importer in the first four months of 2021 was Taiwan, with 90,765 mt, or 27% of the total. The Netherlands came in second with 58,133 mt, or 17.5% of the total, the data showed.