The chlorine balancing act
22 Aug 2000
Unsurprisingly, this can lead to problems. If caustic soda is in oversupply, it can be stored, with appropriate safeguards. But as chlorine cannot be stockpiled, so if demand weakens, production must be stepped down - regardless of the situation in the caustic soda market. `There is often a problem in balancing the demand for the two,' said Fryer.
In practice, the profitability of the chloralkali business depends on the caustic soda market. When soda is in oversupply, producers compete fiercely and drive their margins down. The same is not true for chlorine: `it is perfectly clear that little more chlorine will be sold if the price is dropped, so producers resist the temptation.'
Fryer expects world chlor-alkali capacities to rise in the coming years, from around 52million tpa today to 54.3million tpa in 2005. This will be fuelled by a rise in chlorine demand of around 2 per cent/year, and 1.7 per cent/year for caustic.
