MOSCOW (MRC) -- In July, the average chlor-alkali plant utilization rate dropped below 70% for first time this year; daily production of chlorine in Europe is down to 22,234 metric tons, as per Eurochlor.
European chloralkali utilization rates in July fell to below 70% for the first time since 2013, according to the most recent Eurochlor figures, as high electricity costs and low demand for chlorine derivatives weighed on production.
At 22,234 tonnes, the July 2022 average daily production was 2.3% lower than in the previous month, and 19.2% lower than in July 2021.
Caustic soda stocks rose both year on year and month on month; they were were 6.4% higher than in the previous month, and 10,638 tonnes above the level of July 2021. This indicates that lower output did not cause stock depletion or a sharply tightening market in July.
Average utilization rates have fallen by 5.8 percentage points in the first half of 2022 compared to 2021, according to Eurochlor figures, with some market players predicting that rates will fall as low as 60-65% in September 2022.
The overall average of utilization rates between January and July is at it's lowest level since 2013, at 76.6%, driven by sky-high electricity costs and globally weaker demand for chlorine derivatives. Demand is softer because of inflation, changing patterns of spending following coronavirus travel restrictions being lifted, and increased uncertainty about the global economy.
As per MRC, European chlorine production and chloralkali utilisation fell year-on-year in June, but caustic soda stocks increased. At 22,759 tonnes, the average daily production in June 2022 was 5.7% lower than in May, and 15.3% lower than in June 2021. At 194,998 tonnes, the caustic soda stocks in June 2022 were 0.3% lower than in May, but 20,876 tonnes above levels seen in June 2021.