Chlor-Alkali Market Overview

Ramakant Bhat
Indian Petrochem 2014

Contents
Chlor-Alkali introduction
Global Chlor-Alkali Industry
Chlor-Alkali Industry in China & India

Outlook for the Industry

About Tricon Energy Ltd

Chlor-Alkali Chemistry

Chlor-Alkali : key segment in Inorganic chemicals

Used in a wide array of sectors including chemicals & petrochemicals

Caustic & Soda Ash >60% of Inorganic Chemicals

Others
Aluminium Fluoride

Caustic Soda

Soda Ash
Inorganic
Chemicals

Carbon Black

TiO2

Calcium Carbide

Sulphuric Acid

Caustic Soda & Chlorine Applications

Global Chlor-Alkali Industry

Global Caustic Soda Capacity (MMTS)

2.5 1.7 0.8
2.5
2.5 3% 3% 2% 1%
2.5 3%
3%

0.1
0%

China

NE Asia ex-China

3.4
4%

N America
W Europe

Europe 12.6
15%

China 40
46%

Indian Sub-continent
Middle East
L America
SE Asia
CIS & Baltic

N. America 16
19%

E&C Europe
[VALUE]
2.4%

Africa
Oceania

ECU COST REGION WISE (USD)

367

365
315

98

170

93
7
25

West Euro

Var. Exp. + Fixed

75

80

86

204

6
41
37

157

Mid East

NEA

101

U.S

10

65
13

14
51

226

75

Steam

Salt

205

China

Electricity

CAUSTIC SODA SECTOR WISE CONSUMPTION

Others
23%

Pulp & Paper

15%

Water
Treatment
5%
Inorganics
13%

Growth in key user sectors likely to

continue to fueling demand
Alumina
12%

Segment

Organics
17%

Detergents/
Textiles
15%

Alumina

5.90%

Detergent & Textiles

5.50%

Organics

4.40%

Water Treatment

4.30%

Caustic Soda Total

2013 Global Caustic Demand 70 MM MT

Other
15%

Avg Growth 2010-15

4%

Inorganic

3.40%

Others

3.20%

Pulp & Paper

2.20%

Pulp
25%

2013 Global Net Exports = 5.5 Mil DMT

driven by alumina & pulp sectors
Alumina
60%

CAUSTIC SODA GLOBAL TRADE FLOW

Global Trade is approx. 13 Mil DMT

Caustic Soda movement within Asia

China Caustic Soda Capacity 40 MMTS

HEILONGJIANG
HEILONGJIANG

1995 5.82 m dmt

JILIN
JILIN
BEIJING
BEIJING

XINJIANG

LIAONING
LIAONING

INNER
MONGOLIA

GANSU

2000 8.00 m dmt

TIANJIN

TIANJIN

NINGXIA

HEBEI

QINGDAO
SHANDONG
SHANDONG

SHANXI

QINGHAI
SHAANXI
SHAANXI

JIANGSU
JIANGSU

HENAN

SHANGHAI
SHANGHAI

XIZANG (TIBET)

Manufacturer
Port
Domestic Producer

HUBEI

SICHUAN

NINGBO

ANHUI

ZHEJIANG
ZHEJIANG
JIANG
XI

HUNAN
GUIZHOU
YUNNAN
GUANGXI

FUJIAN
FUJIAN
GUANG
DONG

DONG
TAIWAN

HONGKONG
HONGKONG
HAINAN

2005 14.70 m dmt

2010 30.00 m dmt

MACAU

Total: 185 producers

Capacity in 2013: 40 million DMT
Capacity over 400,000dmt: 22 producers
Capacity between 100,000 and 400,000dmt: 107 producers
Capacity below 100,000dmt: 56 producers

2012 37.36 m dmt

2013 40.00 m dmt

China Caustic Soda Production (MMTS)

40.0
35.0

34.0

30.0
25.0
20.0
15.0

8.5

9.8

10.7

11.9

18.1

14.7

10.0

5.0

7.3

8.2

9.4

10.6

2003

2004

12.4

15.1

19.7

17.6

24.8

18.5

27.9

18.9

37.4

30.2

20.9

24.7

27.0

0.0

2001

2002

2005

2006

China Production

2007

2008

China Capacity

2009

2010

2011

2012

Chlor-Alkali Industry in India

India Caustic Soda capacity

2011-12
000DMT

2012-13
000DMT

2013-14
000DMT

Capacity

3126

3126

3202

Production

2555

2540

2614

Demand

2774

2841

2914

Imports

219

301

300

2014 -15 Capacity estimated 3.4 MMTPA

Caustic Soda Major Producers in India

Company

Capacity (kT)

Aditya Birla Group

493

Gujarat Alkali

413

DSCL

275

Reliance Industries

168

Sree Rayalaseema

124

The Andhra Sugars

132

Kanoria Chemicals

128

DCW Ltd.

100

Others

1,369

Total

3,202

CAUSTIC SODA - SECTOR WISE CONSUMPTION (%)-INDIA

ALUMINA
14%

ORGANICS
12%

SOAPS &
DETERGENTS
7%

INORGANICS
8%

PULP & PAPER

15%
TEXTILES
21%
OTHERS
16%

DYES & INKS

PHARMACEUTICALS
3%
0%
PESTICIDES
1%

WATER TREATMENT
3%

INDIA ALUMINA
ALUMINA CAPACITY 000 MT
2014

CAUSTIC DEMAND FOR ALUMINA 000 DMT

2014

2016

2016

930

10070

670
6820

2016

2016
2014
capacity

2014
DEMAND

192,194 DMT

186,279 DMT

80%

300,635 DMT

7,352

100%
90%

301,275 DMT

34,858

62,627
82,630
72,143

17,230

70%

90,700

60%

92,716

50%
40%

134,190
112,699

30%

153,327
126,439

20%
10%
0%
2010-11

2011-12

Other

Iran

2012-13

Saudi Arabia

2013-14

Antidumping Duty on Caustic Soda in India

Countries on which antidumping duty applicable
USA
EU
South Korea
China
Saudi Arabia
Thailand
Norway
Taiwan
Iran

: $ 55.96/DMT
: If landed value below $415.46/DMT
: Nil to landed value below $366/DMT
: If landed value below $401/DMT
: Nil to $ 133.6/DMT
: If landed value below $379
: If landed value below $379
: If landed value below $361
: Nil to $8.75/DMT

Countries on which antidumping duty was applicable in past

but currently exempt;
Japan
Qatar
Indonesia

Indian Caustic Soda Scenario

The major end-users of Caustic Soda in India are
paper/pulp/manmade fibers/alumina
25% of total installed capacity of 3.20 MMT per annum is used captively
while rest are for merchant trade
There are around 37 caustic soda units spread across India and most
of it under 100,000 MTPA
All Mercury plants excepting one have been successfully converted to
Membrane in line with pollution requirements
The level of integration in India is very low as compared to West
Europe and North America, which have an integration
level of about 86% and 52%, respectively.
While plants outside India are Chlorine centric, plants in India are
Caustic centric.

Outlook for the Industry

GLOBAL OUTLOOK AND CONCLUSION

- North America : Shale gas low energy cost will bring new
capacities and expansions of Chlor alkali
- South America : New capacities/expansion of Alumina,
Paper/Pulp capacities will increase demand for Caustic Soda
- Europe : Outlook not good due high production cost and weak
economy.
- Asia : Few regional expansions expected to cover the regional
demand increase in Chlorine (As EDC) and Caustic Soda
- China : Will remain burdened due high capacity, low operating
rate, slowing economic growth. Will need a boost to
turnaround.

- Middle East : New Alumina capacities in that

region will consume part of Caustic produced
and reduce export volume.
For Iran, due to sanctions India will continue to
remain the best netback market.
- India: No new major Chloralkali capacity
expected due lack of Chlorine outlet. With
increasing Alumina capacity in Eastern India and
insufficient local availability, there will be a
major import demand for Caustic Soda in that
region.
- Antidumping duty on most of the logistically
competitive sources will add burden to the
Alumina industry.

About Tricon
Founded in 1996
30 Local Offices
280+ Employees

28 nationalities speaking 22 languages

Trading & Distribution of Chemicals & Polymers
Leader in Caustic, Styrene, Xylenes & Pygas

Global Coverage Local Presence

Future

Curiosity for new products

Passion for new places
Creativity for new services
Tricons evolution is the result of the commitment
of its partners to expand into additional markets
and support new product lines and industries, but
always keeping our people as the core of our
strategy. As a result, the employee base, the
number of offices, and the quantity and quality of
our business keeps growing year after year.
Ignacio Torras, CEO

Thank you
Dhanyawad