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9th August 2013

Caustic Soda – Liquid

(Asia Pacific)
Editor Jasmine Khoo,

Click for Price History Price Range Four weeks ago US CTS/LB
FOB N.E. ASIA USD/DMT n/c 315-320 n/c 320-340 14.29-14.51
CFR S.E. ASIA USD/DMT n/c 360-375 n/c 380-390 16.33-17.01

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Asia liquid caustic soda unchanged on subdued trade

Meanwhile, a separate northeast Asian maker chose to focus
Asia liquid caustic soda prices held steady during the week on fulfilling contractual volumes over selling spot parcels,
ended 9 August amid limited fixtures as a persistent gap in considering the weak demand situation and the weak prices.
buying and selling indications hampered trading activity. Chinese domestic market

Furthermore, with weak demand from downstream alumina Domestic liquid caustic soda prices were mixed amid moderate
and the pulp and paper industries, spot appetite continued to trading sentiment. Prices for liquid soda declined in some
be curtailed, with buyers purchasing only on a need-to basis in regions but increased in other regions on the back of
small volumes to prevent inventories from building up. production cuts amid low trading sentiment. Prices mostly
fluctuated slightly in Shandong amid moderate trading
Some buyers were also expecting greater supply to come from sentiment.
the Middle East following new start-ups in the third quarter,
which explained their weak buying interest, though no Prices decreased in northwest China and market participants
significant influx of Middle Eastern-origin cargoes has been were pessimistic about the outlook. Prices in Zhejiang edged
observed in Asia so far. upwards as local chlor-alkali units were shut down. Prices in
Guangdong kept decreasing amid poor trading sentiment.
As a result, trading activity remained subdued in both the
southeast and northeast Asian regions with most market In northeast China, trading sentiment in Shandong was
players adopting a wait-and-see stance to observe the market moderate. Prices were largely stable as suppliers faced no
further. Some sellers added that instead of reducing prices to large inventory pressure and downstream producers made
stimulate spot buying interest and wind up incurring losses, normal purchases. Affected by the Eid ul-Fitr holiday, prices in
they would rather remain by the sidelines and focus on fulfilling northwest China decreased and deals were limited amid low
contracts. trading sentiment.
The ongoing Eid ul-Fitr holiday in some parts of southeast Asia Domestic prices of 32% liquid caustic soda in northern China
also weighed on buying interest. softened by yuan (CNY) 50/dmt on the low end of the
assessed price range to CNY1,350-1,950/dmt EXWH during
However, moving ahead, market participants anticipate the week ended 8 August.
improved demand when market players from India return from
with the end of the monsoon season to replenish their In eastern China, Jiangsu, sales pressure eased in response
dwindled inventories. Similarly, buyers who had been holding to continual production cuts at local chlor-alkali units and
off procuring fresh cargoes due to the Eid ul-Fitr holiday are producers intended to raised their prices. Prices in Zhejiang
expected to start buying again in the near future as well. slightly increased because of tight supply caused by the
Northeast Asia turnaround at local chlor-alkali units.

In northeast Asia, fixtures were still very limited as buyers and During the week ended 8 August, eastern China’s liquid
sellers could not compromise on a common price for spot caustic soda domestic prices firmed by CNY63/dmt at the high
cargoes, especially when demand was weak and most market end of the assessed price range to CNY1,938-2,094/dmt
players were uncertain about the near term price outlook for EXWH.
caustic soda. Domestic prices of chlorine in China were assessed as stable-
A buyer was in the talks with a northeast Asian producer, to-soft during the week ended 8 August.
though the negotiation did not translate into any deals as the In Shandong, prices fell by CNY100/tonne on the high end of
seller was not able to accept the bid at $315/dmt FOB NE the assessed price range to CNY50-200/tonne EXWH week on
Asia. week on 8 August, while prices in Jiangsu fell by
A separate northeast Asian producer was offering late August CNY100/tonne to CNY50-200/tonne EXWH during the same
and September-lifting parcels at $330/dmt FOB NE Asia during time period.
the week, but has not managed to sell any cargoes as the Southeast Asia
buyers’ bids were too low to be workable for his margins.

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Caustic Soda – Liquid (Asia Pacific)

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The southeast Asian region was subdued during the week as A northeast Asian trader, who did not disclose its offer, said it
most of the market participants were inactive because of the received a bid of $290/dmt FOB NE Asia from a southeast
Eid ul-Fitr festival, which weighed on buying interest. Malaysia Asian buyer. The trader said this price was too low to be
and Indonesia-based market players said most of the market workable for its margins.
activity would only resume following the return of the market
participants after the Eid ul-Fitr holiday. In the meantime, the bulk of the regional sellers were still
targeting prices of $320-330/dmt FOB NE Asia, which translate
Furthermore, with some buyers expecting lower prices in the into $370-390/dmt CFR SE Asia, considering the freight costs
near future due to increased supply from new start-ups in the from northeast Asia to southeast Asia.
Middle East, buying ideas were also lowered, making it even
more difficult to conclude deals as the gap between buying and ($1 = CNY6.12)
selling indications widened.

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