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Spread - chlorine by-product netback
What it is
Caustic soda demand generally exceeds chlorine demand, so chlorine accumulates as a surplus by-product. Producers sometimes pay customers to take it away, giving a negative netback
Chlorine cannot be stored or transported easily, so it must be consumed near the plant
Impact on industries
- Negative chlorine realisation directly reduces ECU, and in weak periods the by-product becomes a disposal cost rather than a revenue line
- Chlorine surplus can force caustic production cuts, so a chlorine problem constrains the profitable product
- Downstream chlorine consumption is the structural fix - PVC, CPVC, epichlorohydrin and chlorinated intermediates convert the surplus into value
- India's PVC deficit of roughly 2.8 mn tonnes is prompting new capacity, and each tonne of PVC fixes about 0.58 tonnes of chlorine