Downstream Demand Consolidating the Caustic Soda Market in Asia

The Caustic Soda market witnessed a stable price trend in the APAC region, owing to the elevation in the domestic offers and escalating energy prices. In late December, the muted buying sentiments in the domestic market impacted Caustic Soda prices. The prices were constant in the last week of December owing to the ease of input cost pressure and sufficient inventories.

In India, the elevation in Aluminium production supported the Caustic Soda market this week. Meanwhile, escalating export offers and crippled availability of stocks in the week ending 30 December 2022 have also remained the factor for the Northward price trend of Caustic Soda. Furthermore, the increased downstream output and reduced custom duty on Caustic Soda impacted the price trajectory of the commodity. Therefore, domestic producers raised the prices amid improving buying momentum in the downstream industries to sustain strong margins. Thus, the price of Caustic Soda Flakes showed a significant increase of nearly 6.5% in the week ending 30 December 2022 in the Indian market.

Caustic Soda prices consolidated in the Chinese market and experienced stability in the last week of December 2022, bolstered by the ease in energy costs and steady demand in the market. According to the sources, the global economic slowdown and sanctions on Russian energy supplies have substantially obstructed commodity value chain. The wait-and-see attitude amongst domestic buyers and the slump in the overseas trading activity of China due to persisting COVID curbs consolidated commodity prices this week. Additionally, downstream players purchased on demand and pursued to destock the inventories, prompting price competitiveness among the producers. Therefore, the Caustic Soda price hovered around USD 163/tonne Ex-Shanghai (China) with a weekly surge of 1% in the week ending 30 December 2022.

As per ChemAnalyst, prices of Caustic Soda may further improve in the first quarter of 2023, owing to the improving downstream demand in the APAC region. In addition, expected fluctuation in the upstream energy prices is anticipated to impact the cost of the commodity. Moreover, the domestic market will likely get more positive on supply and demand in January 2023.