A Slump in Asian Sodium Chlorite Prices Amid Insufficient Demand

At the beginning of the third quarter of 2024, the Sodium Chlorite price market showcased bearish sentiments in Asia and market players reduced their quotations by 8.6% in July 2024. The demand for Sodium Chlorite's downstream product, chlorine dioxide, decreased notably in critical sectors like textiles and paper for bleaching purposes. This demand reduction was compounded by an oversupply situation in the market. Despite steady production levels, the softening of demand led to an imbalance between supply and demand, exerting downward pressure on prices. Additionally, the overall market sentiment remained cautious, as both buyers and sellers braced for potential further price adjustments influenced by seasonal fluctuations. It negatively impacted the Sodium Chlorite consumption rates in the Asian region. Consequently, producers revised their quotations negatively to improve Sodium Chlorite offtakes from the market.

Consequently, Sodium Chlorite exports decreased for the importers, and Maersk reported a 44% decrease in net profit, totaling USD 833 million during the second quarter of 2024. This decline occurred despite a 7% increase in loaded volume and a 2.3% rise in average loaded freight rates. Although strong volume growth and higher freight rates in Asia's export markets had a positive impact, these benefits were offset by increased operating costs due to challenges in the Red Sea and rerouting around the Cape of Good Hope. While profitability improved compared to Q1 2024 and Q4 2023, it remained below the level of the same quarter in the previous year.

Meanwhile, the availability of feedstock Sodium Chlorate was inadequate during the month due to increased consumption rates. Consequently, Sodium Chlorite production costs increased due to increased feedstock prices. This resulted in moderate operating rates at manufacturing units.  According to the ChemAnalyst data sources, the Sodium Chlorite 25% Ex-Mumbai quotations in India witnessed USD 762.26 at the end of July 2024.

As per the estimation, the Sodium Chlorite prices are likely to increase in the Asian market in the second half of quarter 3 of 2024. The demand for Sodium Chlorite might improve from bleaching agent manufacturers for the textile sector amid the upcoming demand for new clothes in the Asian market during the festive season. Consequently, Sodium Chlorite offtakes would remain consistent from the market for stocking purposes to avoid delays amid supply disruptions. Simultaneously, the production costs would escalate due to the anticipated incline in feedstock Sodium Chlorate prices amid low availability of supplies due to affliction in production due to the ongoing typhoons and monsoons in the Asian region.