Caustic Soda Demand Hit as the Industry Faces Pandemic Woes

India’s Caustic Soda Industry is facing cold winds due to demand slowdown exacerbated by a prolonged halt in industrial operations due to nationwide lockdown imposed by the Indian Government to curb the spread of novel coronavirus. Hammered by reduced manufacturing activities in pulp and paper, textile industries and feeble demand from soaps and detergents sector, the suppliers and manufacturers are apprehensive as demand would take time to recover even if manufacturers have resumed partial operations in their plants. Weighed by the demand slowdown, India’s Caustic Soda industry is currently dealing with mounting inventories triggering weakness in its pricing in the first quarter of FY21. Prices for flakes have declined modestly oscillating between INR 28- 32 per kg in the first week of May. To lighten the impact of Covid-19 over the already ailing Caustic Soda sector, on 24^th April, the Aluminium Association of India (AAI) urged the Central Government to drop its plans to increase tariffs on Caustic Soda imports in the form of COVID-19 tax as it may lead to a huge loss to the domestic aluminium industry which relies heavily on Caustic Soda reports. Caustic Soda is a crucial raw material used in soaps and detergents, textiles, aluminium sectors and the country imports huge volumes to cater to its industrial needs.