Olin, the largest global chlor-alkali producer, is raising its prices for caustic soda in North America for a second time this year, according to a letter to customers obtained by S&P Global Platts.
The letter said Olin would increase off-schedule prices of both diaphragm-grade and membrane-grade caustic soda by $40/dst in the US and C$50/dmt in Canada.
Olin said its order control program based on 100% allocation remains in effect, with required lead times of three days for truck shipments, 14 days for rail car shipments and 30 days for barge shipments.
The price increases announced Monday will be effective immediately or as contract terms permit, the letter said.
Olin, OxyChem, Shintech and Formosa Plastics all announced $85/dst price increases for caustic soda in the US in February, while Westlake Chemical announced a $40/dst increase. Westlake followed up with a second increase of $50/dst, pushing its total increase so far in 2018 to $90/dst.
And all five producers announced price increases ranging from $70-$115/dst in November, depending on the grade.
Strong caustic soda margins have prompted producers to run chlor-alkali plants at high rates since early 2016 amid strong local and export demand.
Producers expect margins to remain strong given growing demand and a lack of planned US capacity expansions other than by Shintech, which is seeking permits to expand the chlor-alkali, ethylene dichloride, vinyl chloride monomer and polyvinyl chloride capacity at its Plaquemine, Louisiana, complex.
Neither Shintech nor its Japanese parent, Shin-Etsu, have announced final investment decisions on those plans, and the project would likely take three to four years to complete.
Olin CEO John Fischer said during the company's first-quarter 2018 earnings call earlier in May that he expects US caustic soda exports to reach record levels this year on strong demand around the globe and reduced exports from China and Europe.
China has reduced its exports to keep more caustic soda in its strong domestic markets, while European Union rules forced mercury-based chlor-alkali plants in Europe to shut down or convert to less toxic production materials. US exports have increased to fill those gaps.
"The combination of the closure of the mercury-based chlor-alkali plants in Europe and no material chlor-alkali capacity additions expected in at least the next three years reinforces our view," Fischer said.
