Caustic Soda
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global Market Outlook on Caustic Soda

• The caustic soda market size in North America is the highest at 16.4 MMT, followed by Europe with market size of 12.4 MMT. Further, the caustic soda market size in Latin America (LATAM) is 4.4MMT.
• The top caustic soda manufacturers in the world include GACL, Aditya Birla Group, and DCM Shriram.
• The global demand for caustic soda was 81.9 MMT in 2019 and the capacity was 88.5 MMT in the same year, indicating oversupply.
• According to industry experts, the caustic soda market will grow at 4-5% CAGR by 2024.
• The major caustic soda markets include Asia, which holds 55% of the total revenue share, followed by North America (18%), and Europe (15%).

Regional Market Outlook on Caustic Soda

• The global caustic soda demand will grow at 3–4% CAGR during 2020–2024
• Asia will remain a hub for caustic soda manufacturers owing to an anticipated increase in the consumption of paper, food & beverages, personal care products, and synthetic fibers.
• The per-capita consumption of caustic soda is not as saturated in Asia as it is in the Western markets.
• The European Union (EU) and North America have low buyer power while Asia has medium buyer power. 
• In the US and Europe, contract transactions are preferred while in Asia, spot transactions are used more often. 
• China is the leading pulp and paper manufacturer across the globe given its large forest reserves, which occupy 22.5% of its land area.
• The Asian country is the ground zero for chemical processing, making up for a bigger slice of all the chemicals manufactured worldwide. 
• Furthermore, China leads the pack in textile production and export globally owing to abundant labor, low-cost production, adequate raw materials, and barriers.
• The caustic soda prices are determined according to the demand. 

Insights

Multiple Sourcing:

• Buyers can engage in multiple sourcing from domestic as well as international suppliers to lower the risk of price volatility and secure supplies.
• Japan is the biggest importer of caustic soda to India, as such, sourcing from Japan can be considered owing to established trade routes. However, logistics costs and import duties have to be looked upon while engaging with multiple sources.

Increasing capacities in India:

• Grasim Industries (part of Aditya Birla Group) has increased caustic soda capacity by 67 percent to 356,000 tons/year
• Nalco and GACL are also expected to bring 267,000 tons/year plant in Dahej by 2020 which will improve domestic supply

Demand growth in India

• The growth of the textile industry in India was expected to reach $230 billion by 2020 thus setting high hopes for caustic soda suppliers.
• Growth in the automobile industry in India will improve the demand for aluminum and, in turn, support the caustic soda demand from alumina smelting

Market Segmentation

The caustic soda market can be segmented based on the type of caustic soda and the end-use application. Caustic soda procurement is critical to understand the caustic soda market.

Caustic soda is usually produced as a caustic liquid. Caustic soda is one of the types of chemicals. Caustic soda lye is caustic 50% liquid. It is a product of Chlor-alkali. Other products of Chlor-alkali include hydrochloric acid, caustic soda lye, sodium hypochlorite, caustic soda flakes, hydrogen, and chlorine.

Based on Type: Caustic soda market can be segmented into lye and flakes. Caustic soda lye is a solution of caustic soda and water. The percentage of caustic soda in lye usually ranges between 32-50 percent based on application.

Caustic soda lye has various applications including use in organic chemicals, paper and pulp production, aluminum refineries, food additives production, use in inorganic chemicals, and textile processing. 

Caustic soda flakes applications include viscose fiber, use inorganic chemicals such as phosphites, pulp production, aluminum refineries, production of paper, detergents, and soaps among others. 

Caustic soda flakes are anhydrous caustic soda, with about 99-99.9 percent caustic soda.

Based on Application:

• During 2017, the textile industry was the biggest consumer of caustic soda followed by alumina smelting and pulp and paper

• During 2017, caustic soda consumption from organic and inorganic chemical formulations formed about 21 percent of the overall demand

• Other applications of caustic soda include soaps and detergent industry, water treatment and dyes and inks among others

Growth Drivers and Constraints

Drivers

Rising Demand for Alumina

• Caustic soda is utilized to process raw bauxite ore into white powder alumina which is further smelted to produce aluminum. 

• The International Aluminum Institute has revealed that the overall alumina production hit 131,910 MT in 2019. 

• Key consumers of alumina include automobiles, building and construction, and packaging. 

• Increasing demand for alumina in these end-use industries will thus bode well for the global caustic soda market.

High Demand from the Chemical Industry

• Investment in membrane technology is as high as $100 Mn for a 100,000 DMT/year plant, which can have an ROI period of 8–10 years, and hence is a major entry barrier for new players.

• Indian manufacturers face fierce competition from imported caustic soda, which is cheaper compared to the domestic produce. This is due to high input and logistics costs within the country

High cost of investment

• Investment in membrane technology is as high as $100 million for a 100,000 DMT/year plant, which can have an ROI period of 8–10 years, and hence is a major entry barrier for new players
• Indian manufacturers face fierce competition from imported caustic soda, which is cheaper compared to the domestic produce. This is due to high input and logistics costs within the country
• Indian manufacturers face fierce competition from imported caustic soda, which is cheaper compared to domestic produce. This is due to high input and logistics costs within the country

Co-product Dynamics 

• The market growth for caustic soda is highly dependent on the chlorine market dynamics
• In H1 2018, chlorine prices hovered around the negative range in India, where the producer had to pay the buyer for chlorine
• The chlorine market is expected to grow with growth in the vinyl segment with the demand for PVC in India

Stringent regulations

• A constraint of the caustic soda market is the stringent regulations which can limit the expansion of the industry. 

High Corrosive Nature 

• Caustic soda reacts with tin, zinc, and copper, and their alloys and produces hydrogen, leading to the formation of explosive gas mixtures.

• Moreover, the reaction of caustic soda with ammonium and amine compounds releases toxic substances.

Why Buy This Report

With this caustic soda procurement and research report, you get: 

• Market share analyses at regional and country level 

• Market data for 2019, 2020, till 2024

• Market trends (drivers, restraints, opportunities, challenges, recommendations, and investment opportunities)

• Strategic recommendations for the new market entrants

• Strategic recommendations in key business segments based on the market estimations

• Caustic soda price and supply chain trends outlining the latest technological advancements

• Competitive scenario sizing up the major common trends

• Profiles of caustic soda suppliers with detailed financials, strategies, and latest developments