Growth in Brazil Chlor Alkali Market with rising GDP

May, 2018

Rise of Brazil’s GDP Driving Chlor Alkali Market

The Chlor Alkali sector is expected to grow along with the rising GDP of Brazil. The Caustic soda activity is expected to bounce back up again next year. The optimistic outlook is placed with the GDP projected growth in Brazil with more than 2.5% YOY growth rate. The information was disclosed on an event of communication with the annual meeting of the Latin American Petrochemical Association (APLA). Thus, the market of chlor alkali and allied industries in the Latin American region seems to witness a push in the upcoming two years.

Reduction in exports & increase in forward integration:

  • Impact on PVC: The major industry that is going to be impacted by the new trend would be Poly Vinyl Chloride and allied industries. This is because the chlorine handling has been a major issue associated with the chlor alkali industry due to little or no investment for forward integration at production facilities. Growth in the industry would encourage capital investments and hence would directly benefit PVC manufacturing and processing at the site location thereby saving cost for the manufacturers.

  • US caustic soda export game: The market US caustic soda exports to Australia rose have risen to 1.2 million mt in 2017 from 533,278 mt in 2015, according to US International Trade Commission data, as US material increasingly filled a gap created as China reduced exports to keep more caustic soda in domestic markets amid strengthening margins. Exports to Brazil, the top destination for US caustic soda, have risen more than 52% since 2013 to 2.56 million mt last year, USITC data show.

Olin expects US caustic soda exports to reach record in 2018: CEO

With a consolidated market share in the North & Latin American region Top global chlor-alkali producer Olin expects US caustic soda exports to reach record levels in 2018 on robust demand globally. This demand would be coupled with the reduced exports from China and Europe. Through February this year, the company’s shipments to Australia were 8% higher and those to Brazil 24% higher than in the first two months of 2017, the data show.

- Satya Shiwani,
Senior Research Analyst,
Infoholic Research