Price Corrections in Global Caustic Soda Market

Published on 27 Dec, 2023

The global caustic soda market observed substantial price corrections in 2023 following the elevated energy costs in 2022. APAC, commanding 55–65% of chlor-alkali capacity, saw a 19% drop, led by China. In contrast, North American suppliers were resilient to declines, maintaining a strong market stance. After Russia-Ukraine challenges, Europe faced surging prices and reduced utilization rates. Nevertheless, the caustic soda market shows promise, driven by stable demand in traditional applications and emerging Li-ion battery opportunities. The outlook foresees price recovery in APAC and Europe, with North American suppliers expected to concede to lower prices for better plant utilization.

The global caustic soda market saw substantial price corrections, following the increased production costs driven by elevated energy prices in 2022. In 2023, average caustic soda prices stood at $570 per ton for APAC, $1,220 per ton for Europe, and $1,315 per ton for the US, following a 19%, 51%, and 3% decline compared to 2022 levels. While APAC and European suppliers accepted the price corrections, those in North America continued to resist the downward momentum of caustic soda prices despite weak demand across global and regional markets. The prices are expected to continue to follow this downtrend in H1 2024 to further close the gap with 2021 prices.

With electricity constituting 40–50% of the manufacturing cost of caustic soda, energy prices have historically dictated the price movements of chlor-alkali products. 


Despite a fragmented supplier landscape, APAC suppliers hold 55–65% of the global chlor-alkali capacity. China dominates 45% of the global supply while India, Japan, Taiwan, and South Korea own significant regional capacities. Formosa (Taiwan), Wanhua (China), AGC Chemicals (Japan), and Adani Enterprise (India) are the leading regional suppliers of chlor-alkali products.

Amid healthy demand from APAC and European markets, current regional capacity utilizations are well over 75%, further pushing suppliers to ramp up production capacities. In response, suppliers such as Xinjiang Zhongtai Chemical (China), Aditya Birla Chemicals (India), AGC Glass (Thailand), and Hanwha Chemicals (South Korea) have announced combined capacity additions of ~2 million tons.

Overall, APAC remains the largest supply market for caustic soda. With planned expansions in the region, it is expected to continue leading the global supply market. Furthermore, caustic soda prices in APAC ($570/ton in 2023) are at the lowest compared to Europe and the Americas, which could continue to attract buyers from these regions despite the logistics challenges.


The market holds 18–22% of the global capacity, with regional supply controlled by US-based suppliers such as Olin, Westlake, and OXY Chem. Since limited legacy companies dominate the market, they can control prices despite the global price movements.

Although demand for caustic soda remained at a stable level, suppliers' capacity utilization continued to be low between 60% and 65%. Furthermore, the suppliers actively resist the price decline as they look to secure higher value sales, in contrast to their APAC counterparts.

The Americas, primarily the US, remains a complex market for caustic soda, as the significant regional supplier consolidation takes the negotiation power away from customers. With caustic soda priced at $1,250/ton in Q3 2023, the suppliers have continued to resist the downward price movement despite weak demand from key consuming industries.


The European caustic soda market is largely consolidated with 8–10% of the global capacity, primarily held locally by INEOS and Dow. Demand is mostly driven by chemical industries, pulp & paper, and water treatment applications.

Europe was severely affected by the Russia-Ukraine war, with prices surging by 3x between 2021 and 2022. Though suppliers had limited control over the increased cost of production, EU-based buyers turned to imports of caustic soda from Asia, which further decreased utilization rates. While the suppliers reportedly operate at over 65% capacity in 2023, they continue to face pressure to reduce prices further.

The 2022–23 period has been difficult for European caustic soda suppliers due to the unprecedented rise in the manufacturing cost of caustic soda. The average caustic soda prices were ~$1,220/ton in 2023, but the suppliers could bring down the prices further to attract the buyers they lost to APAC-based suppliers.


Although Li-ion battery manufacturing has emerged as a new application of caustic soda in the last couple of years, its demand is concentrated only in a few countries such as China, Taiwan, and South Korea. Demand from traditional applications including alumina, chemicals, pulp & paper, and water treatment is expected to grow at a steady pace of 3–5%.

The road ahead for the global caustic soda market looks promising, with price recovery expected from APAC and Europe. Although North American suppliers have continued to resist the price decline, they are expected to accept the lower prices to increase plant utilization rates.