According to a recent report from the American Chemical Weekly, rising energy and electricity prices are putting significant pressure on sodium chlorate producers across North America, particularly smaller companies that lack the financial resilience to withstand these increases. With production costs climbing, many facilities are now operating well below capacity, raising concerns about long-term sustainability in the sector.
Over 60% of North America’s sodium chlorate production is based in Canada, where energy and transportation costs have surged, making it increasingly difficult for manufacturers to remain competitive. The strengthening Canadian dollar has also added to the challenges, as it makes exports more expensive and less attractive. Recently, Canexus shut down its 54,000-ton-per-year sodium chlorate plant in Ontario, while Erco is planning to close its 48,000-ton facility in the same province next year. In fact, some plants are currently running at just 30% of their full capacity due to high electricity costs.
Industry analysts suggest that even if production capacity is further consolidated, the market could still maintain a balance between supply and demand. This is because high energy costs may also lead to the closure of some downstream pulp mills, which are major consumers of sodium chlorate. As a result, suppliers have raised prices by 3% to 5% to offset rising operational costs.
Despite these challenges, demand for sodium chlorate in North America is expected to grow by 1% to 1.5% this year. Export demand, however, is projected to rise more sharply, with a 5% to 10% increase overall. Notably, exports to Japan have jumped by around 25%, driven by the country’s shift toward chlorine-free bleaching in its pulp mills. Pulp production accounts for over 90% of total sodium chlorate demand.
Looking ahead, medium-term demand in North America may decline due to the closure of several paper mills. However, export volumes are unlikely to fall, as countries like Japan, South America, and parts of Asia lack sufficient local production capacity due to high energy costs or inadequate infrastructure. This creates a continued need for imported sodium chlorate, ensuring that the global market remains active despite regional challenges.
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