The Asian caustic soda market recorded flat prices for the week ended August 15, 2025, and minor movements were restricted to China's key provinces. The stable performance was supported by evenly matched supply and resilient downstream demand in the Asian market.
In China's Shandong Province, major 32% ion-exchange membrane caustic soda market price had slight upward revisions towards the end of last week. Inner Mongolia was strengthening, which reflected a predominantly firm but stable tone in the local market. Jiangsu Province also followed with having little deviation from previous levels.
On the supply side, production constraint due to maintenance in a few of the Shandong plants eliminated formation of any significant inventories. East China factories, having been in production, contributed to local supply, maintaining overall supply at levels that were in proportion to market demand. Market players had pressure on inventories, allowing producers to maintain Caustic Soda prices in check despite fluctuating patterns of demand.
On the demand side, producers of alumina continued uninterrupted buying of liquid caustic soda, providing firm support to consumption levels. Downstream on-demand buying was elsewhere, though, as a result of seasonally weakening in textiles, paper, and chemicals markets. That divergence among lines of demand created a balancing effect that permitted Caustic Soda prices to avoid runaway spiking or falling.
Stock in Northeast and Central China decreased modestly, and in Henan notably, though delivery was not disrupted. In Shandong, short-run inflation led to near-term buying in the bulk market by aluminium smelters with plant-level stock.
Caustic soda futures contract last week registered a marginal advance on short-term readjustment of supply and spec buying. Long-term fundamentals were not affected with market participants anticipating futures prices to stay below a mild squeeze with a massive inventory buildup and cautious downstream buying. Market consensus is that futures prices also served as a stabilizer.
In general, the Asian caustic soda market was firm in mid-August 2025, offsetting spike alumina demand by maintaining stable supply levels. Although short-term fluctuations can be induced by operating adjustments or futures speculation, trends suggest continued stability in the next few weeks.
As per ChemAnalyst, market participants are optimistic but guarded for the Asian caustic soda market. Most market participants saw caustic soda as remaining supportive in the near term, and direction would be led by the speed of downstream restocking and plant runs. The interplay among alumina demand, supply rebound, and seasonal consumption would be the catalyst to lead near-term direction in the Caustic Soda market.
