APAC Caustic Soda Market Gains Strength in Early October Amid Rising Demand

At the start of October 2024, the Caustic Soda price trend in the Asian market exhibited a slight surge, with demand from the downstream alumina sector showing signs of recovery. In September 2024, the market displayed an upward trend, with transaction conditions improving in the region.

In China, Maintenance activities at some facilities in Shandong significantly bolstered Caustic Soda prices and inventory pressure on enterprises remained low this week. In September, downstream alumina demand maintained a stable to strong trajectory. Several aluminum plants, needing to replenish supplies, made concentrated purchases, which further drove up Caustic Soda prices. The alumina market continues to face tight supply, suggesting ongoing demand for Caustic Soda replenishment at the start of October 2024. According to the National Bureau of Statistics of China, the Manufacturing Purchasing Managers' Index was assessed at 49.8% in September 2024.

On the demand side, essential procurement by major downstream alumina producers provided solid support for the Caustic Soda market, while demand from other downstream industries saw a slight increase in Asia. Overall, demand improved compared to previous periods. From both supply and demand perspectives, there has been little overall change, and Caustic Soda is expected to maintain a strong market performance in the near term, contingent on downstream market demand.

Caustic Soda supplies were low during the first week of October 2024 in Asia due to decreased inventory levels stemming from reduced production rates across the region. In Taiwan, production activities have come to a halt in preparation for Typhoon Krathon, which is expected to strike the southwestern port city of Kaohsiung in the early hours, bringing sustained wind speeds of 173 km/h (107 mph) and gusts up to 209 km/h (130 mph). The storm has already caused heavy rainfall and strong winds across the area. Recently, the operating capacity of the domestic industry has stabilized at an average level. In mid-September 2024, Typhoon Bebinca led to significant vessel congestion in China, which may disrupt vessel schedules at destination ports in the regional market. Pre-National Day stocking demand has been partially fulfilled, resulting in a decrease in finished product inventory. Overall, the supply side is providing moderate support for current Caustic Soda prices.

As per ChemAnalyst, the Caustic Soda market outlook for October 2024 remains positive in Asia, as the downstream demand in the Alumina sector gained slight strength. Recent domestic macroeconomics has been positive, with policies aimed at strengthening the non-ferrous sector in China. In the real estate sector, regional procurements may remain persistent during this month. Thus, improving aluminum demand combined with optimistic expectations for terminal demand, have contributed to a short-term bullish market situation for Caustic Soda in Asia.