European Sodium Hypochlorite Prices Dive as Market Confronts Excess Supply and Seasonal Slows

Hamburg (Germany): In the first half of August 2024, the Sodium Hypochlorite market experienced a notable decline, driven by seasonal demand pattern and changing market dynamics. The seasonal slowdown in demand for cleaning and disinfection products, combined with increased production capacity and stable raw material costs, has resulted in a temporary oversupply. Consequently, prices of Sodium Hypochlorite have decreased by around 3% amid these market conditions.

Stable prices for key raw materials such as chlorine gas and caustic soda have significantly contributed to stabilizing production costs. This stability, coupled with increased supply of Sodium Hypochlorite, has led to reduced prices. Nonetheless, demand from water treatment and bleaching sectors has remained relatively stable, which has somewhat balanced the supply-demand dynamics.

In Europe, chlorine production has risen markedly, with output increasing by 13.3% year-over-year to 4.11 million metric tons in the first half of 2024. The average utilization rate of chlor-alkali plants has improved to 69%, up from 62% in the same period last year. Despite a slight month-over-month increase in chlorine production in June to 22,168 metric tons, the overall Sodium Hypochlorite supply remains high due to accumulated inventories.

During past few months, Sodium Hypochlorite demand was moderate, primarily driven by consistent needs in the water treatment and bleaching sectors. However, the slowdown in the cleaning and disinfection industry has placed a pressure on prices. BASF, a major player in the market, has focused on regaining pricing power to boost earnings growth, particularly in China. The company's adjusted profit increased by 0.6% in the second quarter to EUR 1.96 billion, although it fell short of analysts' expectations.

Looking ahead, the Sodium Hypochlorite market is expected to continue experiencing weaker prices due to high inventories and increased production capacity. The oversupply situation is likely to persist, keeping prices under pressure. Stable raw material costs are anticipated to support lower production costs in the near term. Additionally, higher imports from Belgium and increased supply of chlor-alkali products from non-EU countries are expected to contribute to the downward pricing trend.

Sodium Hypochlorite prices are projected to remain subdued throughout October due to high inventories, stable raw material costs, and increased imports from Belgium and non-EU countries. While Sodium Hypochlorite prices may see some support from rising agricultural demand and the trade season in November, they are expected to turn bearish by December as agricultural demand eases and inventory pressures alleviate. Despite higher energy costs and potential production disruptions, seasonal demand for cleaning products and water treatment may moderate the Sodium Hypochlorite pricing trend, reflecting a complex interplay of market factors.