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Last year we talked about the challenges facing us with the price of caustic soda increasing and EU law forcing the closure of mercury cell production facilities throughout Europe, including the UK. This in turn led to us applying a surcharge on all products containing caustic soda from 1st December 2017.
We are committed to reviewing this on a quarterly basis, and as such, have just carried out an analysis for the market both independently and through our supply base. In general, the situation remains very tight following the removal of the volumes from the UK and European Market since the mercury cell closures. Two other issues have also come to the fore: 1 - we experienced an increase in caustic soda price in January 2018 which we have not passed on to our customers and 2 - caustic soda plants are now entering the shutdown season for maintenance and, as a result, supply is finely balanced and a delay in plants coming back on stream could again cause further market problems.
However we have seen more importers enter the European market again as prices have remained high. We believe this will help hold the prices for quarter two 2018.
For the time being our caustic soda surcharges will remain in place until further notice. We will of course continue to monitor the situation closely and manage and minimise the financial impact of these cost increases. We have already taken major steps to invest in new improved production equipment, energy saving initiatives and many other cost control measures both internally at Gateway House and with our own supplier base.
We thank you all for your valued custom and if you would like to discuss the issue in further detail please liaise with your Technical Sales Consultant.