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According to Sinochem New Network, recently Ken Lane, CEO of the renowned U.S. chlor-alkali chemical company Olin Corporation, said that the reduction in production at ethylene plants in Asia, coupled with several companies declaring force majeure, has led to a chain reaction of production cuts across the olefin and chlor-alkali industries, resulting in a tighter supply situation in the global caustic soda market. Layne revealed during the earnings call that approximately 6% to 9% of the world’s olefin production capacity has been shut down, with several Asian olefin manufacturers forced to declare force majeure due to shortages of raw materials and soaring costs. By 2025, the Middle East will account for over 60% of Asia’s naphtha imports. The instability in the Middle East and the closure of the Strait of Hormuz have severed Asia’s main sources of naphtha supply, causing the operating rate of cracking units in Asia to drop sharply from 83% in February to 57% in May. Ethylene and chlorine are key raw materials for the production of polyvinyl chloride; a reduction in ethylene production in Asia directly affects the output of vinyl-based products. Chlorine is difficult to store and transport, and the operating rate of chlor-alkali plants declines alongside the ethylene industry, forcing Asian manufacturers to reduce their chlor-alkali production capacity, which in turn leads to a decrease in both chlorine production and the production of caustic soda as a by-product. Currently, some PVC manufacturers in Asia rely on imports to maintain production, leading to a sharp increase in demand for dichloroethane exports from the United States. Layne predicts that, driven by supply shortages and high costs, prices of substances such as dichloroethane and caustic soda will remain high and stable throughout the year. Layne also said that Olin’s chlor-alkali and vinyl plants in North America are located far away from disruptions in raw materials and energy supplies in the Middle East, giving them a geographical advantage. The company’s market performance has shown signs of recovery in the first quarter, and profits are expected to increase significantly in the second quarter. This positive trend is likely to continue into the third quarter and throughout the year.