Houston — US caustic soda prices could benefit from the latest round of proposed tariffs on Chinese goods if imposed, market sources said.
The Trump Administration last week announced $200 billion in tariffs on Chinese goods, in addition to $34 billion imposed July 6 expected to be followed by another $16 billion this week. China retaliated with $34 billion in taxes on US goods on July 6, and is expected to retaliate in kind with another $16 billion that includes crude oil, gasoline, polyvinyl chloride, ethylene dichloride and low density polyethylene.
China has not overtly said it would respond to the $200 billion with tariffs of the same value on US goods, but this week filed a complaint with the World Trade Association over the latest plan amid escalating trade tensions between the two economic superpowers.
The $200 billion list contains goods that China does not export to the US, such as ethylene dichloride. China is the largest recipient of US export EDC.
However, China was the No. 2 importer of caustic into the US in 2017 behind Taiwan, according to US International Trade Commission data.
“Should only help the US position into the export market,” a source said of potential tariffs on Chinese caustic soda.
Brazil, Australia and Jamaica are the top three markets for US export caustic soda, a by-product of chlorine production that is a key feedstock for alumina and pulp and paper industries. China barely receives any US caustic soda.
But on imports of Chinese caustic soda, USITC date showed 72% of 872,091 mt in caustic soda imports went to US West Coast ports in 2017, while nearly 19% went to East Coast ports. China shipped 17% of last year’s imports.
US caustic soda imports also have fallen 55% to 872,091 mt in 2017 from 1.94 million mt in 2008.
–Kristen Hays, [email protected]
–Edited by Richard Rubin, [email protected]
Source: S&P Global Platts
