Damage to the US chloralkali market in the wake of hurricane Katrina does not look to have been too severe, it has been claimed.

Despite the fact that nearly 30 per cent of the country's capacity was in the storm's path, the industry managed to come through relatively unscathed, providing good news for iridium and ruthenium producers, as these are used in the production of chlorine and caustic soda.

However, high energy costs have continued to hamper chloralkali producers, with natural gas hitting a new high of $13.08 per mmbtu last week.

That is an important consideration, according to Steve Brien, global practice leader of chloralkali & vinyls at Chemical Market Associates, who pointed out that energy costs account for almost 70 per cent of the variable cost to produce an electrochemical unit (ECU).

The result of these price hikes is a $50 per ton increase in prices of for caustic soda and a $25 per ton rise for chlorine.

But despite the added expense, one leading producer told Chemical Market Reporter: "We announced a price increase to maintain margins, but given the increase we will probably still lose some margin."

Referring back to the aftermath of Katrina, Mr Brien predicted: "If anything, demand may increase because of the need for materials for the rebuild."


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