caustic soda prices

Houston (Platts)--9Jun2011/342 pm EDT/1942 GMT

Despite strong appetite from Asian and South American markets, global caustic prices in June are expected to remain pegged in the $450-480/mt levels as demand in Europe and the United States has softened, market sources told Platts this week.

Asian caustic soda tightness was said to be due to supply constraints from Taiwan's Formosa Plastics and limited production and power outages in China and Japan.

In Taiwan, Formosa restarted its 1.09 million mt/year caustic soda plant in Mailiao, Taiwan on June 1, after declaring force majeure (FM) on caustic soda supplies on May 12 due to a fire at an LPG unit. Despite the restart last week, Formosa has kept the FM in place this week due to low inventories.

In China, concerns prevailed as many coastal and some inland provinces were facing power shortages, with reports suggesting that this could likely worsen during the summer.

Meanwhile in the US, producers continued to push for a $50 increase on July contracts. The increase was originally posted for June.