The collapse of Baltimore's Francis Scott Key Bridge could slow movement of caustic soda in the northeastern US at a time when tank supplies in the region were already tight.
Caustic soda distributors have tanks in Baltimore where material can be sourced from both domestic and European producers by truck, rail or ship. In the past US producers have moved caustic soda by ship up the east coast to meet demand in the region, particularly when European producers have had fewer cargoes available.
Any threat to supply flow through Baltimore by ship is lessened by the presence of other tanks in the region, including nearby Philadelphia, that can be supplied by overland methods. But even modest complications to logistics for a couple of weeks could put pressure on pricing in the area.
The Port of Baltimore closure comes as European chlor-alkali rates have risen to meet greater chlorine demand on the continent, producing more by-product caustic soda as a result that could be sold to the US east coast.
Distributors and caustic soda buyers in the northeastern US have warned that inventory levels in the tanks at various sites were getting severely tight during the first quarter before seeing some slight improvement in recent weeks.
This dynamic allowed for price increases from distributors to be implemented in the northeast more consistently in the first quarter compared to other parts of the country, where supply and logistics were better. Argus assessed Northeast US prices in March flat between $1,060-1,110/dst ex-tank after prices had risen $25/dst over the previous two months.
US caustic soda producers have announced price increases for April and second quarter contracts between $35-75/dst.
