Caustic Soda Edges Higher in India, Extensive Demand from Surfactant Segment to Counterbalance Supply

Caustic Soda prices have been witnessing continuous drift since mid-Q4 due to extensive supply pressure. Contrary to the market expectations, Caustic Soda values in India have witnessed a significant rebound in the first two weeks of January due to sudden surge in the demand from detergent and surfactant segment in the wake of Omicron spread.

Caustic Soda values in India largely tumbled in Q4 with arrival of hefty shipments from the regional market. As per a trader based in Gujarat, mounting inventory levels especially after mid-December continued to pressurise its prices. Amidst the extensive pressure from supply side, government keened to review the anti-dumping duty on Caustic Soda from various countries. However, Miners body in India restrained from the idea of antidumping duty from Oman, Japan, Iran and Qatar in lieu of the already high cost on logistics within the nation, which makes it difficult to fulfil the demand requirements in the sector.

In India, demand for chemicals utilized in disinfectants and surfactants has observed a steep surge in early January in line with the rise in inquiries from downstream buyers amidst the unprecedented of Omicron variant of Covid in the nation. Amidst the rise in demand, Caustic Soda prices have surged by nearly 16% in the first two weeks of January. Supply situation which has been limiting the profit margins for producers, is being gradually counterbalanced by the rise in demand from detergent and surfactant segment.

China is currently preparing itself for a weak long holiday in February, thus Caustic Soda buyers in the regional market have begun stockpiling their inventories to abate any hurt to consumer sentiments. As US partially gathers to Caustic Soda imports from India, spate of upcoming turnarounds in the country in Q1 is likely to pressurise suppliers to lean on India for catering to the demand in the nation. As per ChemAnalyst, “Caustic Soda prices are expected to continue tracing an upward trajectory till February owing to the expected rise in demand from regional market due to an anticipated halt in supplies from China in February. Besides, upcoming supply shortage of Caustic Soda in US is also likely to compel the nation to import cargoes from India.”