Asian caustic soda prices hit 2024 high on strong demand, supply constraints

Asian caustic soda prices surged to their highest levels of the year in late October, fueled by robust demand from the Chinese alumina sector – the major downstream segment of caustic soda – and persistent supply constraints throughout October.

Significant gains were observed across both the FOB Northeast Asia and CFR Southeast Asia markets as tight supply and ongoing restocking of alumina intensified competition from China.

Platts, part of S&P Global Commodity Insights, assessed FOB Northeast Asia caustic soda at $460/dmt Oct. 29, up $35/dmt from the previous year-to-date high on Oct. 22, and higher from $330/dmt Jan. 9, reflecting steady increases driven by expanded alumina production and maintenance outages at multiple chlor-alkali plants.

A China-based trader said, “With new alumina production coming online and boosting demand, we’re seeing a continuous push on pricing.”

Supply-side factors have also played a crucial role in the price hikes. Shutdowns at chlor-alkali plants, including those at Jiangsu Haixing and other regional producers, have tightened available supply.

“The Northeast Asia FOB market could remain elevated through November as we work through current supply constraints,” said a producer in the region.

Platts assessed CFR Southeast Asia caustic soda at $535/dmt Oct. 29, up $35/dmt from the previous year-to-date high on Oct. 22, and higher from $405/dmt Jan. 9.

Buying activity slows, cautious sentiment

The rapid escalation in prices has slowed new orders, prompting several Southeast Asian buyers to pause inquiries.

Market observers suggested that while prices may stabilize at current levels, the prevailing high prices have led many participants to regard October’s peaks as a potential ceiling, with a plateau likely ahead.

In the Chinese domestic market, Platts assessed 32% caustic soda solution Yuan 15/dmt lower from the previous assessment at Yuan 1,025/dmt Oct. 29.