Producers hike prices for both flake and liquid products
By Staff -- Purchasing, 2/10/2000
Flake- and liquid-grade calcium chloride producers have recently announced price increases for North American customers.Effective in mid-December 1999, General Chemical Industrial Products, Parsippany, N.J., raised its off-schedule prices for flake calcium chloride by $10/ton. The company also announced price increases for all forms and concentrations of liquid calcium chloride by $7.25/ton (4¢/gal).
Then, about a month later, Dow Chemical Co., Midland, Mich., followed suit with its own calcium chloride price-hike announcement. Dow raised all grades of its dowflake(r) flake calcium chloride by $20/ton.
In spite of these announced increases, however, buyers responding to Purchasing's monthly chemical transaction price survey forecast flat prices for anhydrous calcium chloride, at least through first half 2000.
Contract prices currently stand at about $185/ton. Spot market prices average about $170/ton. Buyers say sales tags could gain a few dollars per ton in the latter half of 2000, averaging about $189/ton for contracts and $175/ton for spot tags by fourth quarter.
Usually, demand swings for anhydrous calcium chloride are dependent upon sales of pellet-grade material used in snow and ice control. This variable is, in turn, largely dependent upon weather conditions. "We've seen about three years of poor snow conditions (and as a result, poor demand for pellet-grade material) due to the weather," says Rick May, director of marketing at Dow Chemical.
But while there hasn't been much snow this winter, at least through mid-January, producers say demand for flake material has still been picking up. "Flake calcium chloride is essentially sold out through January," says May.
According to producers, the price increases come in response to limited material in the marketplace, due to a good dust-control season in 1999.
"We had a good season for flake calcium chloride used in dust-control applications throughout the summer of 1999, so the market is pretty tight," says May. "A large amount of both flake and liquid calcium chloride was used through September as a dust suppressant on secondary roads," he says.
"Also, from September through December, a lot of flake material was used to stabilize recurrent flooding at IMC Global's K-1 and K-2 potash mines, located in Esterhazy, Saskatchewan, Canada," according to May.
Flake and liquid grades of calcium chloride are used primarily in oil drilling, mining and dust-control industries. Flake-grade material may also be used as an ice deterrent, though its use in this application is limited.
The second largest market for calcium chloride is production of oil and gas completion and work-over fluids, which are used to stabilize mines and prevent particulate from clogging oil bore heads. Because many mine sites are located in remote areas, much of the calcium chloride used in this application is shipped in liquid form.
Other markets for calcium chloride include concrete acceleration and production, industrial applications and in food and brining markets.
General Chemical and Dow Chemical are the major producers of flake calcium chloride in North America. The third player in the domestic market is Kemira Chemical, based in Sweden, which brings about 8,000-10,000 tons of material annually into the U.S.
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