Our Caustic Soda reports are published weekly in Asia, China, Europe, Latin America and the US, giving industry participants a truly global view of market movements.
There are solid and liquid spot quotations, depending on the region, and market news including information on shipping, international trade, upstream and downstream movements, as well as production issues. This analysis and intelligence equips you with the information you need to make vital business assessments.
Updated to Q4 2020
Supply for liquid caustic soda in Asia decreased slightly in Q4 as LG Chem’s November outage at its Yeosu cracker in South Korea forced the company to also lower its chlor-alkali operating rates. Some brief outages in Japan during late December also further constricted supply. Nevertheless, most producers sought to keep chlor-alkali operating rates as high as possible due to greater chlorine demand into the production of polyvinyl chloride (PVC).
Spot demand for liquid caustic soda in Asia saw a slow and steady recovery, particularly in late Q4 as buyers in Asia sought to restock ahead of the year-end holidays. Consumption also improved in late 2020, following the start-up of PT Bintan Alumina’s alumina refinery with an output of 1 million tonnes/year. Domestic consumption was also slowly improving in some Asian countries such as Japan, said market participants.
Caustic soda supply was healthy in Q4, with high prices for chlorine derivatives supporting chloralkali production. Prices for products such as PVC and isocyanates rose significantly, which prevented chloalkali operating rates from falling despite very low caustic soda prices. Euro Chlor data showed year-on-year increases in output for chlorine and derivatives in October and in November.
Caustic soda demand remained flat to mixed in Q4 as the pandemic continued to weigh on consumption in downstream industries. Demand for caustic soda in hospitality, alumina, paper production industries remaind low. Producers and buyers aimed to reduce stocks and working capital in December, which contributed to weak demand and prices.
Caustic soda supply in Latin America during the fourth quarter 2020 showed some increase due to reduced buying interest. Pricing experienced downward pressure due to competitive international availability. Pricing was mixed as some countries kept prices unchanged while others saw a decline and Argentina saw an increase due to local production issues at plants and inability to import product due to stringent import regulations. Shipments of Middle East and Europe product to Brazil were frequent.
Caustic soda demand in Latin America during the fourth quarter 2020 was sluggish due to reduced business activity in all industries as a result of the pandemic and the approach of year-end holidays. Lengthening supply across the globe contributed to softer pricing. Currency devaluation against the US dollar was another culprit for the slow economies in the region.
Liquid caustic soda supply slowly grew during Q4 after a series of planned maintenances and unplanned outages came to an end. Operating rates for US chlor-alkali plants rose to a near-normal 80% in November from 71% in September, according to the Chlorine Institute. Operating rates and production of caustic soda remain below their usual levels against weak demand from the industrial sector, including chemicals, refineries and other subsectors.
Liquid caustic soda demand continued to recover from Q2 lows imposed on the market from coronavirus lockdowns. Demand from the pulp and paper and textile sectors continued a slow recovery and the alumina sector remained relatively stable. Demand from organic and inorganic chemicals remained weak, but with slow recovery. Demand to soaps and detergents was weaker on the lack of demand from the institutional and hospitality sectors.
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Caustic soda, with its co-product chlorine, is produced via an electrolysis of brine, in the ratio of one part chlorine to 1.1 parts caustic soda.
Caustic soda is a white, deliquescent solid in various forms with no odour. It is very soluble in ethyl alcohol and water. It is a strong base, reacts violently with acid and is corrosive in moist air to metals like zinc, aluminium, tin and lead forming a combustible/explosive gas (hydrogen). It rapidly absorbs carbon dioxide and water from air while contact with moisture or water may generate heat.
Its main uses are in the manufacture of pulp and paper, alumina, soap and detergents, petroleum products and chemical production. Other applications include water treatment, food, textiles, metal processing, mining, glass making and others.
The production of alumina from bauxite is a major end-use application for caustic soda.
Caustic soda is a basic feedstock in the manufacture of a wide range of chemicals. It is used as an intermediate and a reactant in processes that produce solvents, plastics, synthetic fibres, bleach, adhesives, coatings, herbicides, dyes, inks and pharmaceuticals.
Other uses include the saponification or conversion of fat, tallow and vegetable oils in soap manufacture, and in the manufacture of surfactants for detergents. It is used in the petroleum and natural gas industries to remove acidic materials from hydrocarbons and off-gases. In the textile sector, it is used in the chemical processing of cotton and the dyeing of synthetic fibres.
Chlor alkali production in the US and Brazil