Chlor-Alkali Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Chlor-Alkali

• Global demand is expected to grow at 2.5 percent CAGR through 2017 – 2022
• Asia is expected to drive the demand for caustic soda, due to an anticipated increase in the usage of paper, food and beverages, personal care products and synthetic fibres
• The per-capita consumption of caustic soda is not as saturated in Asia as it is in the Western markets

Demand Market Outlook

The global caustic soda market was moving tighter in through 2017, with capacity closures in Europe which led to capacity loss of 1MMT/year. The supply–demand gap is expected to reduce between 2018 and 2022, eventually causing a decline in buyer power over the period

Global Market Size: Caustic Soda

• The global caustic soda market is expected to reach $44.8 billion by 2022. The key market driving end use is the CPG segment (paper packaging, food and beverage, and personal home care chemicals).
• The Asian market is expected to witness a high growth rate of approx. 7 percent CAGR, followed by the Middle East, ranging from 4 to 5 percent CAGR
• Saturated markets, like the US and Europe, are expected to witness a growth of approx. 3 percent CAGR between 2017 and 2022

Global Capacity–Demand Analysis

• Buyers from the CPG industry (typically small-scale buyers in the caustic soda market) will encounter issues, such as securing  supplies and increase in price premiums, especially in Europe, due to the impending capacity loss, with no major capacity additions in major markets in the coming years
• Supply – demand gap will shrink from an estimated +12 MMT in 2017 to +5MMT in 2022

Market Outlook  

• Capacity Removal:

–The EU mandate to shut down all mercury based plants by December 2017 in Europe has led to plant conversions to membrane cell technology.

–It has also resulted in overall capacity loss of about 1MMT in Europe as major players in Western Europe will be producing caustic potash instead of caustic soda.

• Capacity Dynamics:

–At the beginning of 2017, the mercury technology accounted for 17.4 percent of EU production capacity, embrane production was 66 percent

–Approximately 7.5 MMT/year new capacities came online in 2015, of which, approx. 7 MMT was from Asia

• Future Capacity Additions:

–Few capacity additions of approx. 500 KMT/year in the Middle East and Asia are under the study phase