Research on Application of Sodium Hypochlorite in Living Water Station
With the New Year, sodium chlorate producers have begun to announce price increases. Effective on the first of January, producers raised prices by $25/ton.
The main reason for the increase is a price recovery in pulp and paper markets. Pulp and paper bleaching is, by far, the largest end use for sodium chlorate in North America, and market price trends tend to have a large impact on sodium chlorate pricing.
Producers also cite material tightness and improved demand due to environmental issues as reasons for the increases.
According to Paul Britt, sales manager at Huron Tech Corp., a sodium chlorate producer based in Delco, N.C., the current market is very tight. "In December, a lot of people were looking for extra product. I even checked with our competitors to see if I could find available material," he says. "There wasn't any."
"The market is strong and pricing is still very low compared to historical levels," says Ed Beckberger, commercial director at Sterling Chemical's pulp business, based in Toronto, Ontario, Canada. "I think [buyers] are going to be in for some substantial price increases in 2000, and they really need to be prepared for the worst," Beckberger says.
Producers expect supply tightness to persist through 2000, which, according to Beckberger, will make additional price increases likely in April and September. "We've seen a significant increase in sodium chlorate demand since last September, which coincides with the recovery in the pulp industry. It appears that sodium chlorate has turned the corner, and the outlook for 2000 is rosy," he says.
Purchasing forecast: Sodium chlorate buyers should expect prices to rise significantly in the next few months. Short supply, combined with increasing demand due to environmental regulations will keep upward pressure on prices throughout the year.
According to buyers who responded to Purchasing's monthly chemical transaction price survey, contract prices averaged $295/ton for contracts and $292/ton for spot tags in fourth quarter 1999. Buyers expect most of the price increases currently on the table to go through, which should bring first quarter 2000 transactions up to around $310/ton for contracts and $307/ton on the spot market. A continued shift among pulp bleaching operations to regulatory-compliant ECF systems will push sodium chlorate prices to $340/ton for contracts and about $335/ton for spot tags by the end of 2000.
EPA deadline approaches
One of the main drivers of sodium chlorate demand has been, and will continue to be, environmental regulations, particularly the U.S. Environmental Protection Agency's (EPA) cluster rules, which are scheduled to go into effect in April of 2001.
These federal regulations deal with the mandatory elimination of elemental chlorine use in industrial bleaching applications. While not the only alternative to chlorine bleach, sodium chlorate (used primarily in the production of chlorine dioxide) stands to gain substantial demand volume as mills shift their operations to ECF (elemental chlorine-free) bleaching processes. Aside from chlorine dioxide, alternative chemicals that may be used to bleach pulp include hydrogen peroxide and caustic soda.
The mandated elemental chlorine usage phase-out has been gradual and ongoing. One producer estimates that about 35% of pulp mills have yet to switch over to ECF operations. While the EPA's cluster regulations give mills until April of next year to comply, many companies are switching over to ECF operation now, due to recent upturns in chlorine pricing.
"Supply is going to be very tight this year," says Sterling's Beckberger. "Most of the mills that have not yet switched over to ECF will be doing so in the fall, so we expect to see a second-round boost in sodium chlorate demand then," he says.
Beckberger notes that the industry is currently operating at around 93% of capacity. "About a year from now, we expect operating rates to be close to 100%," he says.
The major U.S. sodium chlorate producers include, Eka Chemicals Inc., Marietta Ga.; Sterling Chemical, Houston Texas; CXY Chemicals (a joint venture between Canadian Occidental Petroleum Ltd. and Occidental Chemical Corp.) based in Calgary, Alberta, Canada; and Huron Tech Corp., in Delco, N.C.
In other supply news, Huron Tech Corp. plans to complete expansion of sodium chlorate operations at its Eastover, S.C., facility. Last year, the company ran the plant half capacity. According to the company, the expansion (an additional 90,000 tons) will be brought on line by the first of March.
In December, CYX Chemicals acquired a 35,500 tonne/yr sodium chlorate facility in Brazil, which it tentatively plans to expand to 57,000 tonnes/yr in the next few years.
The largest single use for sodium chlorate is generation of chlorine dioxide that is used for bleaching chemical pulp. Other uses include weed control applications, potassium chlorate and sodium chlorite production and some textile applications
