European liquid caustic soda spot prices in both northwest Europe and the Mediterranean sustained further losses this week, falling to their lowest levels since 2004, market sources said on Friday. Liquid caustic soda prices slipped a further $50/DMT (dry metric tonne) (€38/DMT) to $200-250/DMT FOB (free on board) in both regions, according to global chemical market intelligence service ICIS pricing. This represented a fall of over $600/DMT from their highest points of $790-800/DMT FOB MED and $810-820/DMT FOB NWE in January 2009. Prices fell once more due to the lack of available storage facilities, said several re-sellers and buyers, as tanks were full of unsold product. “The global market for caustic soda has completely collapsed over a short space of time,” a trader noted. “Demand from the key pulp and paper and alumina industries has been hit hard by the economic crisis... the spot market has really suffered.” Sources in the market said the availability of caustic soda was largely governed by its by-product chlorine. At its highest price of $790-800/DMT FOB MED and $810-820/DMT FOB NWE in January 2009, chlorine operating rates were cut back to 50-60% due to poor downstream polyvinyl chloride (PVC) demand, making caustic soda extremely tight. However, the reasons behind the recent fall remained somewhat unclear. Many sources believed that the ramping up of operating rates to a reported average of 75-80% had combined with a sharp decline in global demand. “Producers have panicked and we have seen some very low offers as a result,” observed one trader. “Operating rates are going down again, but caustic soda stocks are still building... there is no opportunity to export anymore... imports from the Black Sea and Asia are still coming in, but everyone is full of caustic soda,” said another. One buyer reported that spot prices were available under $200/DMT FOB NWE, but there was no confirmation of this from the sell-side.