To our valued Chlorine and Caustic Chemical Customers,
With regret, we must alert you that Force Majeure has been declared by suppliers in the chlorine and caustic chemical industries.
At Alexander Chemical, we pride ourselves on our reliability and commitment to delivering strong customer service that demonstrates our appreciation and respect for our customers. In the interests of transparency, we have therefore detailed how the industry has arrived at the present circumstance.
Why has Force Majeure Been Declared among Chlorine and Caustic Chemical Suppliers?
This past year has been truly challenging for domestic Chlor Alkali producers.
COVID-19 initially resulted in the shutdown of industrial manufacturing, due to the drastic reduction in consumer demand. This immediately caused operating rates at the Chlor Alkali plants to drop in capacity from 87-90% to under 70%, limiting the outflow of Chlorine due to the lack of demand for Caustic.
The summer of 2020 resulted in further challenges, as hurricanes hit the Gulf Coast. This rendered a different kind of havoc on the Chlor Alkali plants that were already struggling with output, supply and demand issues.
Additionally, states in the South and Southwest of our nation are now experiencing some of the lowest temperatures ever recorded in the aforementioned regions. The supply of energy and natural gas to industrial plants has been curtailed or severely limited and Chlor Alkali plants are unable to maintain significant production.
The Declaration of Force Majeure
Due to issues caused by unprecedented weather, Chlorine and Caustic producers have had no choice but to initiate Force Majeure, declaring that they are unable to supply as promised.
So far, the two largest Chlor Alkali producers have announced such measures. The other 5-6 domestic producers are either in the process of making the same declaration, or are close to doing so. Two of our suppliers, accounting for almost 45% of all merchant Chlorine and Caustic output, have already made their declaration.
Expectations for the Future
It is our expectation that these issues will continue to impact operations throughout this year, with the possibility that they will not be overcome until late fall or early next winter. This is partially due to the dependency on global economic recovery to allow for plants to scale up their Chlorine output.
We ask for your understanding at this unprecedented time, and welcome you to contact us Contact Us for further information as the days go by. We assure you that we are doing all we can to keep our commitments to you and manage the situation as effectively as possible.
We truly value your business and support throughout these turbulent times. We cannot thank you enough for your patience and flexibility, as we strive to offer the same courtesy to our trusted suppliers.