Sodium Hypochlorite Prices to slump further across the globe as demand Dampness returns in early May 2024

Hamburg (Germany): Global Sodium Hypochlorite prices fell in April 2024 due to lower demand and higher inventories worldwide. This decline was also influenced by falling freight prices across the Mediterranean and an increase in shipping capacities added since January. Prices dropped by 2 to 4% on a monthly basis for Germany FOB Hamburg outbound deliveries to Balkan and Italian markets.

Conversely, Chinese outbound deliveries from Qingdao FOB basis to East Asian and Southeast Asian markets remained steady as downturns intensified in the Chinese Chlor-Alkali industry in the past month. ChemAnalyst anticipates that rising freight charges and increased supply side risks from the Mediterranean supply, among other factors, will further intensify in the region. Therefore, the forecast for May has been revised to a price decline, while prices are expected to begin recovery in the following two months.

Sodium Hypochlorite is a major product of the Chlor-Alkali industry, which continues to face significant downturns in Europe due to production limitations of high energy intensity. Since September 2022, when the extra costly gas contracts came into effect, margins of Sodium Hypochlorite producers have turned negative, with suppliers running plants at high financial debts to fulfill contract obligations.

This forced contract prices in Europe from October 2022 to March 2023 to remain higher by 33% compared to previous rates. Inquiries reveal that on an FD basis, Switzerland, Belgium, and the Netherlands received shipments worth USD 320-350/MT for 300 tons from a major German supplier due to a strong increment in prices.

Market participants acknowledge that high-priced goods remained a financial burden, but demand for Sodium Hypochlorite remained strong until October 2022, although indications of fatigue are seen in the quantities being imported. The trend since March 2024 is exactly opposite, with demand for Sodium Hypochlorite remaining lower in April and subsequently into May 2024 due to intensified downturns in the Chlor-Alkali industry.

Eurochlor data reveals that operating rates fell from 74% in February 2024 to 68% in March 2024, and further down to around 65% in April 2024 as stocks of both caustic soda and chlorine increased due to weak demand. Inquiries with industry players suggest that major consumers of Sodium Hypochlorite, such as textiles and paper, are placing lower orders and trimming down production to meet only contractual obligations. Civil demand for Sodium Hypochlorite also remained subdued. This situation is also evident in Asia, where despite Chinese manufacturing returning to an expansive mode, inventories of Sodium Hypochlorite continue to remain high due to subdued production.

Also, CFR Shanghai Sodium Hypochlorite charges assessed by ChemAnalyst for Indian deliveries have risen by 12% due to lower availability of containers in the Asian-Northern Europe route via Malacca. Assessment revealed that freight charges for Sodium Hypochlorite, sold at USD 200/MT, deliveries have increased substantially by 8% WoW basis in mid-April, thus Indian importers have reduced their inventory sizes and is pulling up Sodium Hypochlorite prices in India. Thus, Indian consumers are facing significant cost pressure for chlor-alkali supply.

ChemAnalyst revised their forecast based on the quotations received and other inquiries made with the participant. Prices of Sodium Hypochlorite are estimated to stabilize by the end of the month or the next month with definite price recoveries in the third quarter of 2024.