The Divergent Market Sentiments for Caustic Potash Results Cautious Price Approach Globally
The Divergent Market Sentiments for Caustic Potash Results Cautious Price Approach Globally

The Divergent Market Sentiments for Caustic Potash Results Cautious Price Approach Globally

  • 06-Nov-2023 3:07 PM
  • Journalist: Patricia Jose Perez

The Caustic Potash prices in the global market exhibited contradicting fluctuations in October 2023 as the higher upstream prices overshadowed demand fundamentals in the USA and Europe. At the same time, the Asian Caustic Potash prices were down based on weak demand and ample stock availability. Subdued demand from household and personal care products contributed to the deterioration in the downstream demand from the surfactant industry.

In the USA, the Caustic Potash prices acquired a steady upward trend in October 2023 and have extended stability for the first week of November 2023, which has primarily resulted from slow-paced growth downstream demand from the detergent and cleaning industry along with resilience in the procurement sentiments within the American market amidst acceptable economic recovery. Apart from downstream demand, the US Caustic Potash market was uncertain as it rose in the H1 of October and recently took a pause for the time being due to volatility in the upstream energy prices. Thus, the steadiness in the Caustic Potash pricing momentum in the second half of October is further prompted by the constrained inventory availability to fulfill recent orders within the regional market, narrowing the demand-supply gap.

Similarly to the United States, the Caustic Potash prices in Europe showed a modest increase in October 2023, even though demand in the regional market was not particularly strong. The recent uptick in Caustic Potash prices resulted from limited supply and decreased production rates due to high operational costs. Furthermore, some Chlor Alkali producers plan to shut down their plants shortly in Europe due to the uncertain market conditions in the region. According to the latest Analysis, European Caustic Potash market participants found it challenging to maintain their profit margins, leading them to reduce their production levels.

Unlike the US and European price trends, the Caustic Potash prices in Asia continued to plunge in October 2023. The downstream demand from the detergent and chemical intermediates segment saw declines for Caustic Potash, leading to further margin compression and rising competitiveness pressure amongst regional players in Asia. Additionally, the unfavorable Q3 results and high product inventory availability threatened market participants in Asia and compelled them to make sales at lower costs for the short term.

As per ChemAnalyst, the Caustic Potash prices might stabilize in Asia due to only marginal shifts in demand expected in the oversupplied market in November 2023. The Chlor Alkali industry may continue to face production challenges, in line with the potential increase in electricity costs during the winter season in the US and Europe, which may impose an increment in the prices of the product amidst a slow-paced recovery in the demand fundamentals.

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