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U.S. Sanctions Russia U.S. Caustic Soda Exports Are Injured
Apr 18, 2018


After the ease of trade issues between China and the United States, Russia was immediately hit by the new round of sanctions and the stock exchange market. However, because the sanctions cannot be exported, there is a chemical in the United States that will be very injured. It is caustic soda!
Recently, the U.S. Department of the Treasury issued new sanctions against Russia and imposed sanctions on 38 Russian individuals and entities. The sanctions include Russian businessman Oleg Deripaska, Russia's Gazprom president Alexei Miller, and Russian Foreign Trade Bank's CEO Andrey Kostin.
According to foreign media reports, U.S. sanctions against Russian companies may further weaken the export demand for caustic soda in the United States. To make matters worse, the demand for caustic soda in Brazil has been affected by the reduction in alumina refinery production, as regulators are investigating river pollution problems.
Dozens of Russian companies sanctioned by the United States, including the Russian Alcoa Union Company, one of the world’s largest aluminum producers.
Caustic soda is an important raw material for the alumina industry, and the Russian aluminum industry is the main buyer of caustic soda in the United States. In particular, UC RUSAL will normally purchase about 300,000 tons/year of US caustic soda.
Currently, RUSAL operates seven alumina refineries and has an annual production capacity of 10.5 million tons. The plants are located in Russia, Ireland, Italy, Guinea and Jamaica.
The sanctions will prevent UC from purchasing caustic soda from the United States. "This will create some changes to the trade flow," said one trader.
In addition, Brazil’s environmental regulatory authority ordered Haidlu’s largest aluminum plant in the world to halve production. Then, the United States caustic soda industry is facing another inaccurate factor in the decline in export demand.
Extreme rainfall in Brazil in mid-February flooded the area where the factory was located, resulting in the leakage of bauxite residue. The Office of the Environment requested a reduction of production by 50%.
Hydro's plant imports 50,000 tons/month (600,000 tons/year) of caustic soda from the United States. After reducing its load, it will drop to 25,000 tons/month.