Baltimore accident starting to strain US caustic

Caustic soda distributors near Baltimore, Maryland, have started applying a logistics fee to all future deliveries to account for longer truck transits following the collapse of the Francis Scott Key Bridge earlier this week.

Caustic soda storage the northeast US was already tight before the bridge accident. While market participants have caustic soda tanks outside of Baltimore, several in the region are out of service due to maintenance.

Additionally, US Gulf coast producers have struggled to supply tanks in the northeast because of difficulties loading vessels on time. US producers have been stretched thinner on inventory throughout the first quarter due to a variety of unplanned outages, as well as planned maintenance taking longer than anticipated.

US producers have been sending more material to the northern US east coast, including by Jones Act vessels, to account for reduced availability out of Europe in recent years. High energy costs in Europe have forced a reduction in operating rates for some time.

As US-based supply and logistics have been complicated, a distributor indicated it has a vessel destined for Baltimore in the next few days that is being redirected to other tanks on the east coast.

US chlor-alkali producers have announced price increases for caustic soda contracts in April between $35-75/dst. These increases have been announced over the course of several weeks, but may carry additional weight following the bridge collapse. With tighter inventories in the region, even buyers that are skeptical of rising prices are concerned about the ability to fight a price increase at the moment.

By Aaron May