Calcium Chloride  

*Short tons per year. All forms (flake, anhydrous and liquid) reported as 77 percent flake. On a 100 percent basis, the total capacity is equal to 1.86 million tons. Product mix varies between producers. Commercial production in the US is through refining of natural brine or by neutralization of byproduct hydrochloric acid with limestone.

Honeywell acquired Allied-Signal in 1999. OSCA is a subsidiary of Great Lakes Chemical.

Weyerhaeuser Company closed its Longview, Washington plant in 1999, eliminating 8 thousand tons and General Chemical acquired Ambar’s calcium chloride plant at Manistee, Michigan in 2000, after Ambar decided to exit the business.

General Chemical idled its Drumheller, Alberta plant in 1993 and then its plant in Amherstburg, Ont., in March 2001. The two plants had capacities of 15 thousand and 500 thousand annual tons, respectively.

Last year Tetra debottlenecked three of its plants, increasing capacity at Lake Charles, La., by 25 percent, and by about 15 percent each at Parkersburg, W. Va., and Amboy, Calif.

Hill Brothers Chemical Company buys calcium chloride solution from National Chloride and Magnesium Corporation of America and processes it into finished product.

DEMAND
1999: 1,238 short tons; 2000: 1,316 short tons; 2004: 1,510 short tons, projected. Demand equals production plus imports (1999: 211 s.t.; 2000: 252 s.t.) less exports (1999: 81 s.t.; 2000: 79 s.t.).

GROWTH
Historical (1995 - 2000): 3.8 percent per year; future: 3.5 percent per year through 2004.

PRICE
Historical (1995 - 2001): High, $250 per metric ton, list, 77 to 80 percent, flake, bulk, c.l., works; low, $250, same basis. Current: $270, same basis.

USES
Deicing, 22 percent; road stabilization and dust control, 20 percent; industrial processing, 20 percent; oil and gas well fluids, 17 percent; concrete, 12 percent; tire ballast, 5 percent; miscellaneous, 4 percent.

STRENGTH
The calcium chloride market is generally balanced and has been so since the end of 2000. With supply and demand fundamentals sound, producers recently implemented a series of price increases to help recoup higher raw materials and energy costs.

The boom in oil and gas well drilling has been very strong in recent years and has contributed positively to the calcium chloride market since liquid calcium chloride is a common raw material for drilling fluids in this market.

Calcium chloride has gained increased recognition as a superior deicing product, and highway mixtures with sodium chloride may be less corrosive than the use of salt alone. Dry summers and a continued high level of construction activity have resulted in steady demand for liquids for dust control.

WEAKNESS
Lower prices for crude oil and gas this year will adversely affect the demand for drilling fluids and consequently calcium chloride demand. And the mild winters of last year and this have reduced demand for deicing products.

Calcium chloride manufactured by hydrochloric acid neutralization with limestone is seeing higher costs due to a reduction in byproduct acid. The hydrochloric acid market transformed itself during the 90's from seasonal shifts between oversupply and balance, to shifts between balance and very tight. Today, isocyanate producers are sending their coproduced acid to ethylenedichloride plants. Additionally, demand for CFCs in refrigerants and other applications has been down, removing more coproduced acid from the merchant market.

OUTLOOK
In recent years, the market demand for calcium chloride has shifted. Consumption within the largest market segment, deicing, is heavily dependent on weather conditions. A sharp decline in this market has occurred over recent years as a succession of mild winters lowered demand. Deicing consumption was 38 percent of total U.S. end use during 1994, but declined to 30 percent in 1997 and then 22 percent in 2000. During this time, demand for calcium chloride in oil and gas exploration increased from 4 percent to 17 percent. Unless there is a change in the general weather pattern, this demand mix is expected to continue.

While the calcium chloride market experienced strong demand from increased oil and gas exploration for the past couple of years. Lower prices crude oil and gas this year will adversely affect the demand for drilling fluids, and with this, calcium chloride as well.

Industry capacity is more than adequate to meet future demands as the industry’s operating rate is about 60 percent. Future demand through 2004 is forecasted at 3.5 percent per year.