US caustic soda exports jumped 25% in the first two months of 2018 compared with the same span a year ago, in part because of a sudden chlor-alkali plant shutdown in Brazil in mid-January that prompted Braskem to seek imports pending a restart.

February export statistics that the US International Trade Commission released this week show higher shipments of caustic soda, a key feedstock in alumina as well as pulp and paper industries, to Brazil, Australia, Jamaica, Canada and Mexico in January and February, compared with the year-ago period.

Brazil is the top recipient of US caustic soda, having received 2.56 million mt in 2017.

Brazil’s demand rose after a fire damaged a utility that powers Braskem’s chlor-alkali plant in Alagoas, forcing an unplanned shutdown that lasted about two months. Braskem secured more than 30,000 dmt of caustic from US and Brazilian sources to cover supply needs during the outage. The plant began restarting mid-March, although operational issues and blackouts initially hindered those efforts, according to a source familiar with company operations.

ITC data shows that, overall, Brazil received 470,231 mt of US caustic in January and February, up 24% from the same months a year ago.

Caustic soda is a byproduct of chlorine production in chlor-alkali plants, while chlorine is a key feedstock in the polyvinyl chloride chain further downstream. Chlorine mixed with ethylene makes ethylene dichloride, which makes vinyl chloride monomer, which in turn makes PVC, heavily used in the construction industry to make pipes, vinyl siding and window frames.

PVC and EDC are among 106 US products on which China Wednesday proposed imposing 25% tariffs in response to President Donald Trump’s proposed import taxes on $50 billion in Chinese goods. Trump said Thursday the US may impose tariffs on another $100 million in US products, to which China’s Commerce Ministry said in a statement on Friday that Beijing does not want to fight, but is not afraid to fight a trade war.

China already has antidumping duties on US PVC, so the 306,079 mt of PVC imports from the US in 2017 was re-exported into Southeast Asia, according to a US producer source. China received 25% less US PVC last year compared with 2017, and 8.5% less in the first two months of 2018 compared to the year-ago period, ITC data showed.

But tariffs would affect EDC. China is the top market for US EDC exports, having taken 370,844 mt, or 27%, of total EDC exports last year. But China took 25% less in 2017 compared with 2016 as it and other Asian markets ran chlor-alkali plants at high rates to capture strong caustic soda margins and used that chlorine output to make more EDC domestically, shrinking demand for imports.

The latest ITC data showed that, in the first two months this year, China received 10,098 mt of US EDC, down 62% from the same span in 2017.

The data also showed a sharp increase in US VCM exports to China through February. Most US VCM is exported on a contract basis to Mexico, Colombia and Canada, leaving little available for spot exports. In 2017, China received 268 mt of US VCM — or less than 1% of total exports of 1.26 million mt.

But in the first two months of 2018, China received 3,635 mt of US VCM — more than 13 times the 35 mt received in the same period in 2017 and 1.5% of the total shipped out.