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More than 60% of sodium chlorate production capacity in North America is in Canada. The increase in energy and transportation costs has severely affected the production of sodium chlorate, and the strength of the Canadian dollar has further aggravated the situation. Canexus recently shut down its 54,000-ton/year sodium chlorate plant in Ontario, Canada; Erco plans to close the 48,000-ton/year sodium chlorate plant in the province next year. The cost of electricity makes the plant load only about 30% of its capacity.
The industry believes that even if the sodium chlorate production capacity is further rationalized, the market may maintain a balance between supply and demand because high energy costs may also shut down some of the sodium chlorate downstream customers' pulp mills. Due to the increase in demand and tight supply, sellers have increased the price of sodium chlorate by 3% to 5%.
Demand for sodium chlorate in the North American market will increase by 1% to 1.5% this year, export demand will increase by 5% to 10%, and exports to Japan have jumped by about 25% because of Japan's pulp mill's shift towards chlorine-free bleaching. . Pulp accounts for more than 90% of the total demand for sodium chlorate. In the medium term, due to the closure of North American paper mills, the demand for sodium chlorate will decline, but exports will not decline. Because countries and regions currently importing sodium chlorate, such as Japan, South America, and Asia, lack sodium chlorate production plants due to high energy costs or lack of an ideal infrastructure.
North American partial sodium chlorate plant is overwhelmed with energy burden. Closing of sodium chlorate price is raised by 3% to 5%
According to the report of the American Chemical Weekly, the high energy and electricity prices will cause more North American sodium chlorate producers, especially those with smaller businesses to close down.