NaOH prices experience downward pressure on the back of strong supply and weakening demand.
There has been a lot of movement in Western European markets for caustic soda (NaOH) in the last one to two months, as producers and customers met to discuss NaOH prices and deliveries in third-quarter contracts. According to EUWID respondents even longer idling of electrolytic caustic soda plants had not reduced NaOH supplies sufficiently to lend support to producers' plans to raise prices for all deliveries as of 1 July. Instead, by July at the latest, it was clear that the plan went into reverse owing to a weakening demand in Europe and strong competition among suppliers.
Given the ongoing problems in the chlorine derivatives business, the margin situation is said to be unsatisfactory for many electrolysis operators. After yet another attempt to raise prices failed, caustic soda suppliers have begun raising serious questions about competitiveness. In particular, electrolysis plants not using the modern membrane technology were at a disadvantage when it came to production costs, EUWID was told. As a result, the future of these plants is now being under debate.