Investments in Chlorine Capacity Continue to Rise

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Researched by Industrial Info Resources (Sugar Land, Texas). In the last twelve months, several significant projects have been developed in the United States and Canada that equal new chlorine capacity for the domestic merchant market. Early this year Bayer Corporation (Philadelphia, Pennsylvania) committed to an estimated $100 million expansion of its Baytown, Texas chlorine unit, which will add nearly 200,000 metric tons per year to the plants’ existing 300,000 metric tons per year capacity over the course of two years. Within this segment of the chemical processing industry (CPI), almost $300 million in total capital and maintenance planned to kick-off next year has been identified by Industrial Info from just 22 individual projects.

Although not the largest expenditure in this segment for next year, plans by Ashta Chemicals Incorporated (Ashtabula, Ohio) to build a grassroot chlorine plant in Arkansas would join Equa-Chlor LLC (Portland, Oregon) as only the second grassroot chlorine plant to be built in North America in the last decade. This $30 million new plant will have an estimated capacity of 35,000 metric tons per year when brought on-line in 2008. Equa-Chlor LLC started-up their new 80,000 metric ton per year plant in Washington during the first quarter of this year and already has plans to double the plant’s capacity within the next two years.

Dow Chemical Company (NYSE:DOW) (Midland, Michigan) recently announced that it is closing a 450,000 metric ton per year chlorine unit in Fort Saskatchewan, Alberta. Much of that capacity was used internally to produce ethylene dichloride, which is also closing soon. Although this will have little impact on the merchant market in Canada and surrounding areas, more than one Canadian producer of chlorine is considering major expansions to increase production and eliminate mercury cell technology. Early this year Industrial Info reported plans by Occidental Chemical Corporation (Los Angeles, Califonia) to convert its chlorine membrane cell technology at their Taft, Louisiana plant to produce potassium hydroxide (KOH) and permanently close its Muscle Shoals, Alabama in 2008.

These unit and plant closures will aid in sustaining or even increasing demand for new capacity from newer more expensive to build technologies that generate no mercury emissions. Over the past couple of years several chlorine projects targeted at reducing mercury emissions or replacing older technology to eliminate mercury emissions have represented a large percentage of total spending in this segment of the chemical processing industry (CPI). Nearly half of the total capital forecast to be spent in this industry segment next year will be to replace mercury cell technology.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.