Caustic Soda Market Faces Challenges in the US, EU and China, Price Oscillates Entering September 2023
- 11-Sep-2023 3:56 PM
- Journalist: Gabreilla Figueroa
The Caustic Soda prices experienced mixed market sentiments across the globe during the first week of September 2023, with an increase in the Caustic Soda prices in China, contradicting the European and US price trends. Further, the Caustic Soda market has been adversely affected due to increased capacity and oversupply across the US and Europe.
In the USA, the Caustic Soda prices were stable for the first week of September 2023, as the downstream offers from the Aluminium industry were unchanged in the line of adequate supplies. In a recent survey conducted by the American Chemical Council, it has been observed that the challenges faced by the US chemical manufacturing industry have shifted from supply constraints to regulatory burdens amidst weak domestic and international demand and low energy prices. Caustic Soda manufacturers reported declining sales, reduced production, and weaker output, with demand dwindling across major customer end markets. In summary, the survey showed a challenging picture for the US chemical manufacturing industry including the Chlor Alkali industry, with regulatory pressures and weakening demand adding to the sector's woes.
The European Caustic Soda prices have fluctuated in a certain range since the last week of August 2023 and declined this week with a pessimistic demand from the downstream aluminum industry amidst rising interest rates by the European Central Bank to pause the inflation and depreciated consumer purchasing confidence in the week ending September 8, 2023. Moreover, the monthly depreciation of the Euro against the US dollar by 1.91% in August 2023 also affected further the buying enthusiasm amongst the regional buyers in the oversupplied Caustic Soda market.
Contradictory, the Caustic Soda prices followed an upward trend in China during the first week of September 2023, owing to the depleting inventories and improvement in the Aluminium industry offtakes for Caustic Soda. The price of Caustic Soda was impacted by the tight supplies amidst reduced production rates. Meanwhile, the downstream demand for downstream alumina improving on account of increasing offtakes across the regional market, and it is expected that the operation will remain strong in the later months of the year.
As per the ChemaAnalyst, Caustic Soda prices may consolidate within the narrow range across the global market on account of a marginal change in demand and adequate supplies. While the challenges may persist for the Caustic Soda industry, the demand remains a glimmer of hope in the line of global headwinds.