Caustic soda FOB Rotterdam spot prices have hit a three-year high on tightness in the market, following news that French chlorvinyls producer KemOne will shut its Lavera, France, chlorine/caustic soda plant this month, sources said.
Prices were assessed Tuesday at $380/mt FOB Rotterdam, a high not seen since July 23, 2013.
The KemOne plant at Lavera is the source of 25% of French chlorine production, or 3% of European production, according to the company website.
The European market was expected to remain tight on a fundamental shortage of production on capacity closures ahead of a December 2017 legislation requirement.
EU legislation requires all mercury-based chlorine and caustic soda capacity to convert to membrane-based production by then.
Current European capacity of chlorine is estimated at 13 million mt/year, according to sources. Chlorine is used to make vinyl chloride monomer which is used to make ethylene dichloride, which is used to make polyvinyl chloride.
