World Analysis – Chlor-Alkali

Duration: Long-term outlook to 2050

Chlorine and caustic soda are co-produced through brine electrolysis, primarily through membrane or diaphragm electrolytic technology. Chlorine and caustic soda consumption are generally aligned with economic growth and activity. However, chlorine demand is closely correlated to construction activity, while caustic soda demand correlates more closely to general manufacturing activities, the global economy, and the consumption of durable and nondurable goods. Vinyls production is the largest global chlorine demand segment, which includes polyvinyl chloride (PVC), ethylene dichloride (EDC), and vinyl chloride monomer (VCM). Other significant global chlorine end uses include chlorinated intermediates, water treatment, MDI, TDI, and epichlorohydrin. Methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI) have clean-energy applications in electric vehicles and wind turbines. Alumina refining for aluminum smelting is the largest global caustic soda consumption segment, followed by organic and inorganic chemicals manufacturing such as isocyanates, polycarbonates, and titanium dioxide. As vehicle electrification continues, more caustic soda will be consumed both for the processing of the metals required for lithium-ion batteries but also in the manufacturing and recycling of lithium battery cells.

The disparate demand drivers of caustic soda and chlorine frequently result in the two stoichiometrically related coproducts being in imbalanced demand tension, especially when external factors such as extreme weather events or interest rates inhibit or catalyze construction activity. As a result, the chlor-alkali industry has an economic cycle driven by the supply and demand dynamics of chlorine and caustic soda. The total electrochemical unit (ECU) value is aligned with the 1 metric ton chlorine to 1.1 dry metric ton caustic soda ratio that makes up the ECU. Ethylene prices magnify the complexity of ECU value dynamics through vinyls production, a segment that consumes more than one-third of all chlorine produced globally. In some geographies, this ratio is more than one-third, such as in the US, where a significant proportion of all chlorine demand is consumed for vinyls production. Fully-integrated chlor-vinyls producers consume electricity, salt, and ethylene in their plants and produce two end products: vinyls and caustic soda. Inasmuch, chlorine is only a manufacturing intermediate, the value of which is determined by the market prices of vinyls and caustic soda and the cost of ethylene. Therefore, in addition to supply/demand balance factors, the implied value of chlorine in integrated vinyls units influences the market value of caustic soda.

Duration: Long-term outlook to 2050

Overview

• Maximize negotiating leverage with forward-looking country-specific supply-demand data.
• Develop a winning strategy based on growth projections of market segments worldwide.
• Gain clarity evaluating investment opportunities and analyzing market leadership out to 2050.
• Mitigate risk with data about emerging international trade flows.

Data Included

The World Analysis – Chlor-Alkali provides a comprehensive analysis and key insights of critical market developments as they shape the future outlook for the global chlor-alkali market.

The following reports, data files, analytical tools and visualization modules are available online and can be downloaded from our website:

• Report outlining key strategic insights and the future shape of global and regional markets.
• Data Appendix (Excel) with supply/demand and capacity tables
• Explanatory Notes detailing data sources, methodologies, unit and conversion factors, and World Analysis deliverables.
• Energy and Economy assumptions
• Price, cost and margin base assumptions forecast and sensitivities analysis; and price assessment methodology.
• Excel data files with standard supply/demand graphics and price forecasts extended to 2050; trade grids with country and region trade flows.
• Online dashboard providing visualization of capacity, supply/demand, trade grids, and price, cost and margin forecasts.
• Supply/demand and capacity database access via data browser
• Capacity by company/shareholder, capacity integration, top producer/consumer and surplus/deficit capacity ranking

In addition to the main product(s), chlorine and caustic soda, capacity and textual analysis is provided for the following products:

• Alumina
• Bromine
• Caustic Soda
• Chlorine
• Chlorobenzene
• Chloroform/Methylene Chloride
• Epichlorohydrin
• Ethylene Dichloride
• Methyl Chloride
• Methylene Diphenyl Diisocyanate
• Perchloroethylene/Carbon Tetrachloride
• Polycarbonate Resins
• Potassium Hydroxide
• Propylene Oxide
• Pulp
• Titanium Dioxide
• Toluene Diisocyanate
• 1,1,1 Trichloroethane
• Trichloroethylene
• Vinylidene Chloride
• Anhydrous HCl

This World Analysis contains detailed information on capacities, production, demand and trade for all significant producing and consuming countries and regions. Although data gathering is essential for the understanding of history and potential future trends, we believe that the interpretation and analysis of the data is the most valuable part for our clients.

Duration: Long-term outlook to 2050