Chinese Price Trend of Caustic Soda Settled at High Values with Robust Demand From End-Use Industries

Shandong, China; Due to strong demand from downstream industries such as soaps and detergents, and in the alumina industry, Caustic Soda flakes prices rose in the Chinese market in the last week of May amid inadequate inventory availability. Due to insufficient inventory availability and paused production activity to meet existing demand from end-use industries, Caustic Soda costs have settled at a high price in China. As a result, the price trend for Caustic Soda in China remained stable in the last week of May and settled at high levels.

During May, the Chinese market's caustic soda prices were influenced by the robust downstream Alumina demand. The product prices in China were stabilised as the number of Covid cases was gradually reduced, and lockdown limitations were eased slightly. Improvements in production activity and robust demand from downstream sectors are the major causes of price stability in Caustic soda. Furthermore, container scarcity and disturbed operations at Shanghai Container Terminal, China's largest container terminal, significantly impacted Caustic soda exports.

The overall supply in Shandong has not changed much, and the downstream is mainly purchased on demand. Due to the logistics issues and a strong wait-and-see mood in the downstream market, traders indulged in maintaining stability and delivering goods. As per the analysis conducted by ChemAnalyst, it is anticipated that the price of Caustic Soda will be slightly adjusted and operated soon, depending on the demand of the downstream market.

As per ChemAnalyst, "Prices of Caustic soda are likely to be stabilized in China due to further stable demand from the end-user detergent and Alumina industries. The Caustic soda cost is expected to be influenced by energy costs amid supply disruption from Russia due to Russia and Ukraine conflict."