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Inorganic Chemicals
PRICING FOR aluminum sulfate (alum) is once again on the rise as producers seek to recoup losses from skyrocketing energy prices, increased operating expenses and rising raw materials costs. Demand is holding steady despite a weakening pulp and paper industry, thanks to solid demand from the water treatment sector. Alum continues to dominate that market despite some moderate inroads from competing polyaluminum chloride (PAC).
Geo Specialty Chemicals kicked off the latest round of price hikes last November, when it increased alum prices by $8 per ton, and other major producers have followed suit. Southern Ionics has instituted a $9-per-ton increase, and GAC Chemical raised its off-list prices for all grades of liquid aluminum sulfate by $8 per ton (dry basis), both effective January 1. "The GAC price increase announcement followed two previously announced increases, and therefore on a regional basis, we can certainly expect some of the increases to hold," says John Benson, president of Delta Chemical Corporation.
According to Denny Grandle, vice-president and general manager of Geo's aluminum products group, the major factors driving the latest round of increases are a combination of high energy costs, manufacturing costs and rising raw materials costs (especially for aluminum and sulfuric acid), as well as producer response to the soft market for alum over the past several years, which has depressed prices significantly. "Pricing is finally starting to gain ground, although it still has a ways to go to get back to where it was eight to 10 years ago," he says.
The good news is that supply and demand are relatively in balance with the marketplace, although the market is very mature, with a projected annual growth rate of roughly 2 percent. Alum's major markets include pulp and paper manufacturing and water treatment, with relatively few new applications emerging requiring large alum supplies to further boost demand. "The pulp and paper sector has a large...