05 October 2011 18:10  [Source: ICIS news]

HOUSTON (ICIS)--US-based Dow Chemical has declared force majeure (FM) on its membrane-grade caustic soda supply after it shut down a unit suffering from mechanical problems, sources said on Wednesday.

“One of our manufacturing units has experienced a mechanical failure, making it necessary to initiate a shutdown of the unit and make immediate repairs,” according to a letter it sent to its customers.

The force majeure went into effect on 4 October and applies to membrane-grade 50% caustic soda solution material.

Dow estimates that caustic soda volumes may be allocated for a minimum of 10 days or until further notice. The company did not specify allocation volumes in the letter.

A company spokesperson with Dow was unable to be reached for confirmation.

A distributor said the affected facility is Dow’s Freeport, Texas, unit. The plant has a listed caustic soda capacity of 3.63m tonnes/year, according to ICIS plants and projects.

Market sources also said Dow was scheduled for a 10-day maintenance turnaround at its Plaquemine, Louisiana, plant. A company source could not be reached for comment to confirm this.

The force majeure is likely to cause concern for the US Gulf caustic soda players, which was already under tight supply constraints because of a seasonal weakening in co-product chlorine demand as well as a sluggish polyvinyl chloride (PVC) market.

US caustic soda spot exports are at $420–440/dry metric tonne (dmt) (€315-330/tonne) FOB (free on board) USG (US Gulf), as assessed by ICIS.

Caustic soda, which is a co-product of chlorine, is a basic chemical commodity with several end uses, including alumina processing, pulp and paper manufacturing and wastewater treatment.

Other major US caustic soda producers include Formosa Plastics USA, Georgia Gulf, Olin, Occidental Chemical (OxyChem), Shintech and PPG Industries.