Chlorine is a naturally occurring chemical element. It is highly reactive and exists chiefly in compounds, bound to other types of atoms such as sodium. To date, more than 2,000 naturally occurring chlorine-based compounds have been identified in all kinds of organisms and places, including the human body.
One of the most common sources of chlorine is sodium chloride (NaCl) naturally available in ocean water and is also found in concentrated mineral deposits remaining from ancient oceans that have dried up over long periods of time. Once NaCl is mined, it must be transported to an industrial chlorine manufacturing facility by dissolving in water to create a brine solution and transported by pipeline or, transporting dry salt by rail or barge to a manufacturing facility and then dissolved in water to make brine. The brine needs to be purified to remove potential contaminants, such as magnesium, calcium, and iron that have the potential to disrupt the electrolysis process. The brine is filtered by ion-exchange membranes that allow only the sodium and chloride ions, along with water, to pass through the membrane. Then electrolysis of brine is conducted to get chlorine. However, this does not completely convert the saltwater to the final products. It gives chlorine gas contaminated with oxygen. Then by cooling the gas, the chlorine turns into a liquid, while the oxygen remains a gas, thus enabling its separation.
The global chlorine production is valued at ~100 million MT in 2020 and it is expected to grow at a CAGR of more than 4% from 2021 to 2027 due to rising demand from the pharmaceutical and agrochemical industries and the increasing demand for PVC from the construction industry. APAC is the leading regional market and accounted for more than 50% of the total market volume in 2020. Increasing construction spending in China, India, Indonesia, and Thailand is expected to drive the regional market during the forecast period. The region is also expected to witness the fastest growth rate of 5% over the forecast period due to the high demand for chlorine from the construction and chemical industry.
The cost of processing sodium chloride holds the key in determining the cost driver of chlorine production. Suppliers that can process sodium chloride more cost-efficiently would have the major advantage in increasing their profit margin for chlorine production. Moreover, the process of chlorine production is also an important aspect while determining the overall cost of chlorine production. This majorly includes fixed costs of machinery, equipment, and maintenance costs.
The global chlorine industry is negatively affected by the COVID-19 pandemic. As APAC is the largest chlorine consumption market, any disruption in production in this region has a huge impact on global production. Major chlorine consumers like India and China were forced to temporarily halt all the industrial operations. This has led to a decline in the production of chlorine across the world. Furthermore, stringent regulations imposed in Europe and North America on the handling of chlorine due to its toxicological nature is expected to be a major concern during the forecast period.
Olin Corporation, Occidental Petroleum Corporation, Westlake Chemical Corporation, Formosa Plastic Corporation, and Nouryon are some of the key suppliers of chlorine. The global chlorine industry features a highly fragmented landscape with leading players contributing less than one-fifth of the market share. Leading suppliers are strengthening their presence through multiple mergers and acquisitions. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
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