For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American Caustic Soda market experienced a significant uptrend in prices, with the USA being a key player in driving these changes. The market dynamics were heavily influenced by supply-related disruptions, reduced production rates, and the impact of severe weather events, particularly hurricanes. These factors led to a constrained supply chain, resulting in increased prices for Caustic Soda.
The market also saw a correlation between the reduced production rates and the surge in prices, indicating a strong demand-supply imbalance. There was a slight dip of 3% from the previous quarter in 2024, highlighting some fluctuations in pricing trends.
The price comparison between the first and second half of the quarter revealed an 8% increase, emphasizing a gradual rise in prices over the quarter. The latest quarter-ending price of USD 415/MT of Caustic Soda 50% Liquid FOB Louisiana in the USA further solidifies the increasing pricing trend, indicating a positive pricing environment characterized by rising costs and market dynamics favoring suppliers.
Asia
In the quarter ending September 2024, the APAC region witnessed a notable surge in Caustic Soda prices, driven by a combination of factors. Supply chain disruptions, including reduced production rates and logistical challenges, created a supply shortage, leading to increased costs. Strong downstream demand, particularly in the surfactant sector, further fueled the price uptrend. This quarter has seen a remarkable 6% increase in prices compared to the previous quarter, highlighting the significant market shifts. Japan, in particular, experienced the most significant price fluctuations, with prices rising by 2.5% from the first half to the second half of the quarter. The current quarter-ending price stands at USD 400/MT of Caustic Soda Flakes FOB Tokyo, reflecting a positive and increasing pricing environment in the region. Overall trends indicate a stable to bullish sentiment, underscoring the impact of supply-demand dynamics and market conditions on Caustic Soda pricing in the APAC region. However, Japan's exports in September saw a decline compared to the same month last year. The unexpected decline in exports raises concerns about the softer demand in major economies, though exports to other Asian countries increased. Temporary disruptions, such as a recent typhoon, have also contributed to the drop at the termination of the third quarter. As a result, Japan recorded a trade deficit on the weak yen, which slowed exports.
Europe
The third quarter of 2024 was a period of significant price increases for Caustic Soda in the European region, driven by a combination of factors. Market dynamics were largely influenced by heightened demand from downstream industries such as Alumina and surfactants, along with supply chain disruptions and reduced production rates across the region. These challenges created a supply shortage, pushing prices upwards. The Netherlands experienced the most substantial price changes during this period, reflecting the overall trend in the European market. Additionally, there was a 6.7% price increase from the previous quarter in 2024, showcasing the ongoing upward trajectory. The comparison between the first and second half of the quarter revealed a notable 11% price difference, underlining the evolving pricing environment. The quarter ended with Caustic Soda Flakes priced at USD 523/MT FOB Rotterdam in the Netherlands in the last week of September 2024, reflecting a consistently positive and increasing pricing sentiment throughout the period. The euro area’s manufacturing sector contracted further at the close of the third quarter. In Germany, Inovyn, with a total production capacity of 20,167 TPM, underwent a plant shutdown for 6 days at the end of September 2024, further impacting supplies in the regional Caustic Soda market and at the same time increasing export demand in the Netherlands, causing a shortage of inventories.
Middle East Asia
In the quarter ending September 2024, the Caustic Soda market in the MEA region experienced a period of increasing prices driven by several significant factors. Supply disruptions and constrained inventory levels were key influencers, leading to a surge in prices across the region. In Saudi Arabia specifically, the market saw the most significant price changes, reflecting the overall trends observed in the broader MEA market. The negative correlation in price changes compared to the previous quarter in 2024 at 1% indicated a shift towards higher prices. The price comparison between the first and second half of the quarter showed a notable 1.3% increase, emphasizing the upward trajectory in pricing. The latest quarter-ending price of USD 416/MT of Caustic Soda Flakes Ex Riyadh in Saudi Arabia solidified the increasing sentiment in the pricing environment. Overall, the pricing environment in the third quarter of 2024 was positive, with prices steadily on the rise. Additionally, domestic supplies in Saudi Arabia were delayed as rising operational costs and reduced production rates affected trading activities towards the end of August. As the logistics industry continued to navigate a complex global landscape, a new challenge emerged with the potential for a strike at the East and Gulf Coast ports in the United States.
South America
In Q3 2024, the South American Caustic Soda market witnessed a significant uptrend in prices, with Brazil experiencing the most substantial price changes. Several key factors influenced this price surge. The tight supply conditions due to production constraints and reduced imports created a scarcity in the market, driving prices upwards. Additionally, stable demand from the Alumina sector, despite economic challenges, played a crucial role in supporting price hikes. The region also faced supply chain disruptions, including port congestion and weather-related delays, further impacting pricing dynamics. In Brazil, the supplier performance deteriorated due to slow logistics and key input shortages, lengthening delivery times and impacting the Caustic Soda trading activities. Brazil, in particular, saw a notable price increase, reflecting the growing market pressures. Despite a minor dip of 2% from the previous quarter, the overall trend was positive, with a significant 6% price increase from the first to the second half of the quarter. The quarter ended with Caustic Soda Flakes priced at USD 612/MT, CFR Santos, Brazil, showcasing a stable yet increasingly bullish pricing environment.
For the Quarter Ending June 2024
North America
In Q2 2024, Caustic Soda prices remained on a marginal surge due to constrained supplies and moderate demand in both regional and domestic markets. In the second half of the quarter, heavy rainfall led to flooding in areas north and east of major petrochemical plants near the Gulf Coast, but operations were minimally affected. The region was already saturated from previous heavy rains. Global shipping container rates are stabilizing, and the Panama Canal anticipates increased transits in May. Liquid chemical tanker spot rates showed mixed trends, with US chemical tanker freight rates. The fluctuating rates increased for shipments from the US Gulf (USG) to Brazil and India, decreased from the USG to ARA, and remained steady on other routes.
The Caustic Soda price trend in the US market was also impacted by supply chain disruptions in the first half of the quarter, following a collision at the Francis Scott Key Bridge in Baltimore on March 26, 2024. The bridge collapse caused significant traffic disruptions at the Maryland port, a key hub for warehousing and transshipment activities, including Caustic Soda. Traders adjusted prices based on warehouse stock availability, and intermittent adverse weather conditions disrupted terminal operations, prompting cautious contingency planning.
Despite modest downstream demand, traders increased prices to maintain margins. The hurricane season also hampered the production rates, adding to the market cautiousness and industrial disruptions, exacerbating the supply-demand imbalance. Focusing on the USA, the region witnessed the most substantial price changes in the second quarter of 2024.
APAC
In Q2 2024, the Caustic Soda market in the APAC region experienced a notable upward price trend, driven by constrained supply chains and increasing production costs. The regional market faced significant disruptions owing to maintenance shutdowns at key production facilities and the persistent rise in freight charges. Additionally, heightened upstream natural gas prices further exacerbated the supply-side constraints, leading to reduced product availability and an overall tightening of the market. Increased downstream demand, particularly from the alumina and surfactant sectors, played a crucial role in sustaining the price elevation, as industries ramped up production in anticipation of higher consumption rates. Focusing on Japan, the country witnessed the most pronounced price changes within the region. The Japanese Caustic Soda market exhibited clear seasonality patterns, with prices peaking due to increased demand during Q2. The overall trend for this quarter indicated a consistent price rise, correlating strongly with the wider APAC market dynamics. The latest quarter-ending price for Caustic Soda Flakes was USD 379/MT FOB Tokyo, affirming the quarter’s increasing sentiment. This pricing environment has been predominantly positive, driven by robust demand and constrained supply, leading to an overall stable yet upward-leaning market trajectory. The strategic interplay of macroeconomic factors and sector-specific demands positions the Caustic Soda market on a growth trajectory, albeit with potential volatility tied to ongoing supply chain challenges.
Europe
In Q2 2024, European Caustic Soda prices rose due to supply chain challenges, including logistics disruptions and rerouted paths resulting from the Red Sea turmoil. The industry faced decreased production rates and supply interruptions, leading to significant reductions in Caustic Soda availability in Germany. Fluctuations in global upstream Natural Gas prices over the first half of Q2 have increased operational costs, further pressuring prices. Contributing factors include tighter physical markets, prolonged production cuts, and escalating geopolitical tensions. Inflation across German states also impacted short-term pricing, while Germany’s push for tighter global energy cooperation positively influenced prices. Consequently, market players raised prices to sustain margins in the European market. European Caustic Soda supplies faced challenges, resulting in reduced stock availability. Additionally, port operations were disrupted as the Verdi trade union initiated a warning strike affecting major ports, including Hamburg, Bremen, Bremerhaven, Brake, and Emden, starting in June 2024. Workers at HHLA and Eurogate terminals in Hamburg ceased operations amid stalled wage negotiations for a new collective labor agreement, causing significant port activity disruptions as reported by German media. The quarter concluded with the price of Caustic Soda Flakes at USD 445/MT FOB Hamburg. Downstream purchasing activity is expected to improve, particularly in the Alumina sector, with increased production rates. As the high season approaches, market players are closely monitoring demand trends. However, minimal inventory procurement sentiments in the Eurozone could hinder significant margin recovery efforts, complicating price hikes to offset upstream cost pressures.
MEA
In Q2 2024, the Middle East Asia (MEA) region witnessed stable yet slightly upward trends in Caustic Soda pricing, driven by a confluence of market dynamics. The quarter was characterized by moderate to increased demand from downstream industries such as alumina and surfactants. This demand, coupled with moderate supply constraints due to logistical disruptions and rising production costs, contributed to the firm price sentiments. Natural gas prices, which remained consolidated, also played a pivotal role in influencing the overall cost structure of Caustic Soda production. Furthermore, the geopolitical tensions in the Middle East led to increased freight rates, further impacting the cost of Caustic Soda. Focusing on the United Arab Emirates, this region experienced the most notable price fluctuations within the quarter. Despite a generally consistent global outlook, the UAE's market demonstrated resilience and a marginal upward trend. Seasonal demand, particularly from the construction sector, and efforts to clear backlogs added to the price firmness. However, the correlation between supply chain delays and increased operational costs was significant. The quarter ended with Caustic Soda Flakes priced at USD 298/MT FOB-Jebel Ali, indicating a stable yet cautiously optimistic market outlook. This pricing environment suggests a balanced market with slightly positive undertones, driven by demand-supply equilibrium and external economic factors.
South America
In Q2 2024, Caustic Soda prices in the South American market increased due to tight supplies from China and the USA. In the northeastern US, logistical challenges and limited inventory levels in tanks at various sites pressured pricing, allowing distributors to implement more consistent price increases. Consequently, US sellers raised Caustic Soda prices, affecting the costs of incoming cargoes for Brazil. In Brazil, Caustic Soda supplies were low due to a surge in import costs and reduced production rates in China, the major exporter. The overall Chinese new export orders index dropped by 4.5% to 50.6% in May compared to the previous month. The China-Latin America trade route faced capacity pressure from soaring demand, with spot rates from China to Brazil reaching USD 6.46 per kg in May. Disruptions in the Red Sea and slow capacity recovery between China and North America further complicated the situation, limiting additional capacity for Latin America. Although delivery times improved slightly (50.1 from 50.4), input cost inflation surged to an eight-month high (56.9 from 54.0), and output prices rose after seven months of decline (50.4 from 49.1). Brazil's Caustic Soda imports declined by 27% in the first quarter of 2024, reflecting low stock availability. Brazilian manufacturers cited rising import and transportation costs, shortages of specific inputs, and crop failures as factors increasing cost burdens. Shipping container costs from Asia to South America skyrocketed, while rates along other significant trade routes dropped.
For the Quarter Ending March 2024
North America
During the first quarter of 2024, the North American Caustic Soda market continued to maintain an upward price trend. The market remained bullish with limited inventories and moderate demand. However, the industry faced challenges including disruptions in logistics and rising freight rates due to ongoing turmoil in the Red Sea region.
The potential disruption to shipping supply routes through Baltimore is partially offset by additional storage capacity in nearby areas like Philadelphia. However, even minor logistical challenges could impact pricing in the region. The closure of the Port of Baltimore coincides with increased Chlor-Alkali rates in Europe, potentially leading to surplus Caustic Soda that may be sold to the US East Coast. Concerns about low inventory levels in northeastern US tanks persist, although there has been slight improvement recently, allowing for more consistent price increases compared to regions with better supply and logistics. This was primarily driven by constrained production volumes and increased demand from the downstream Alumina sector.
The USA Caustic Soda market witnessed an 11% increase in prices compared to the previous quarter, with a significant 6.8% increase observed in the latter half of the first quarter. The latest recorded price for Caustic Soda 50% Liquid FOB Texas in the USA during the first quarter of 2024 was USD 362/MT during March 2024.
APAC
The first quarter of 2024 proved challenging for the Caustic Soda market in the APAC region, particularly in Japan. Overall, the Caustic Soda market in the APAC region, specifically in Japan, faced challenges in the fourth quarter of 2023 due to weak demand, supply constraints, and increased production costs. The market encountered several factors that impacted prices and overall market conditions. Firstly, there was a decrease in demand from downstream industries such as alumina and cleaning due to economic slowdown and reduced manufacturing activities, resulting in a surplus of Caustic Soda supply in the market. Additionally, the increased cost of production, particularly energy costs, put pressure on manufacturers and led to tighter profit margins. Lastly, the limited availability of stocks further contributed to the weak market conditions. In Japan specifically, the Caustic Soda market experienced significant price fluctuations during the first quarter of 2024. These price fluctuations were mainly influenced by supply constraints and limited downstream demand. The country witnessed reduced production activities and inventory digestion, leading to a tightening of market supply. Furthermore, the weak demand from the aluminum industry, coupled with increased input costs, further impacted the prices in Japan. Despite these challenges, the prices managed to remain relatively positive due to midstream shipments and average spot circulation. Specifically, the price of Caustic Soda Flakes FOB Tokyo (Japan) at the end of the first quarter was USD 366/MT. These challenges were further compounded by shutdowns in certain plants, such as the Sinopec Qilu Company in Zibo City, Shandong, due to a major fire incident. However, despite these difficulties, the market managed to stabilize, and prices saw a slight increase during this period.
Europe
The Caustic Soda market in Europe faced a challenging Q1 in 2024, with various factors impacting the industry. Plant shutdowns occurred in the region during the quarter, but the Caustic Soda market remained uncertain due to weak downstream demand and limited supplies. For instance, Nobian GmbH Werk Bitterfeld in Germany experienced a shutdown due to technical issues, resulting in a disruption in production. The plant was expected to resume operations by early April. Inovyn in France also faced temporary shutdowns due to technical issues, but the plants resumed production by mid-March. Caustic Soda prices surged in the German market due to an increase in downstream Alumina demand and constrained supplies. The downstream aluminum industry, serving as a gauge for economic vitality, was on the brink of recovery, fueled notably by the expected rise in global demand. A rebound in consumption in Europe played a crucial role in this industrial resurgence. However, challenges emerged as Russian aluminum exports to the European Union were projected to decline due to ongoing trade sanctions. Nonetheless, the U.S. aluminum industry remained a symbol of growth, undeterred by a GDP slowdown, illustrating the intricate dynamics of global economic interactions. Thus, the prices of Caustic Soda resulted from the positive signs of revival in downstream orders, and the supply chain grappled with challenges, including disruptions in logistics and the need to reroute paths due to turmoil in the Red Sea in the German market.
Saudi Arabia
During the first quarter of 2024, the Caustic Soda market in the Middle East and Africa region faced a new set of challenges that impacted pricing dynamics. These challenges were driven by various factors including changes in demand from downstream industries, economic recovery, and geopolitical uncertainties. One of the main factors that influenced pricing dynamics was the fluctuating demand from industries such as alumina and cleaning. The economic recovery in the region experienced a slowdown during this quarter, leading to decreased buying confidence among market participants and destocking activities. This, in turn, impacted the demand for Caustic Soda and contributed to the downward pressure on prices. Additionally, ample supplies and reduced purchasing activities also played a role in price fluctuations. The market experienced a surplus of Caustic Soda, leading to increased inventories and further downward pressure on prices. Geopolitical uncertainties and disruptions in shipping added to the challenges faced by the market during this quarter. These factors created additional obstacles for market participants, resulting in further pricing fluctuations. Among the countries in the region, the United Arab Emirates (UAE) witnessed significant changes in Caustic Soda prices during this quarter. The UAE market experienced a decline in prices, primarily due to weakened demand and increased inventories. The slow growth in the aluminum and cleaning sectors, combined with a sluggish economy, affected the buying confidence of downstream industries. Despite these challenges, the UAE market managed to maintain pricing stability, with minimal fluctuations observed. In terms of price trends, the quarter-ending price for Caustic Soda Flakes FOB-Jebel Ali in the UAE was recorded at USD 285/MT.
South America
In the first quarter of 2024, the Brazilian Caustic Soda market faced fluctuating prices due to various factors. Tight supplies in the US contributed to a significant price increase in Brazil by the end of March 2024. Additional storage tanks in Baltimore helped mitigate potential disruptions to shipping routes, but logistical challenges remained a concern. Limited inventory levels in northeastern US tanks during the first quarter led to consistent price increases in the region compared to others with better logistics. Earlier in March, Brazil experienced rising Caustic Soda prices due to shortages and production delays in the US. Weather disruptions in the US further affected supplies to Brazil. Traders adapted pricing strategies based on available stocks and implemented contingency plans to mitigate disruptions. In addition, increased demand from the surfactant industry and limited supplies had also driven up Caustic Soda prices in Brazil. Strong performance in Brazil's construction and consumer goods sectors, along with increased aluminum production and sales, further influenced pricing dynamics. Overall, downstream demand fluctuations and supply chain challenges played significant roles in shaping Caustic Soda prices in Brazil during this period. Thus, the price of Caustic Soda Flakes was assessed at USD 555/MT, during March 2024 with the latest increase of 7.7% at the termination of the quarter.
For the Quarter Ending December 2023
North America
The Caustic Soda market in North America witnessed an increasing Q4 2023, with several factors impacting the market and prices. One of the primary reasons for October’s upward trend was the shortage of supplies, which led to a rise in prices, particularly in the US market.
The domestic and regional demand for Caustic Soda remained robust, primarily driven by the downstream Aluminum and cleaning industries, despite a slow-paced economic recovery. The input costs surged amid the weak US dollar, leading to higher cost pressure on the US market players. Furthermore, the Caustic Soda prices in the second half of the quarter witnessed marginal downstream demand from the Aluminum segment while destocking sentiments among market players weighed on the price momentum. The Caustic Soda prices stabilized in December 2023 due to a pause in production activities.
The latest price of Caustic Soda 50% Liquid FOB Texas in the USA for Q4 2023 is USD 329/MT in December 2023. The price trend for the USA in Q4 2023 is expected to be bullish, with a low to moderate supply and moderate to high demand. Overall, the Caustic Soda market in North America remained volatile, with various factors impacting the prices throughout the fourth quarter.
APAC
In the APAC region, the Caustic Soda market in Q4 2023 witnessed mixed market sentiments as the overall market was affected by a pause in purchasing sentiments, leading to an overall decline in prices. Secondly, weak demand in various countries, including Japan, Indonesia, and Vietnam, contributed to the downward trend. The Alumina and cleaning industries experienced low consumption, as buyers in these sectors engaged in year-ending destocking activities. In the middle of the quarter, the Caustic Soda prices in the APAC market witnessed a decline, primarily attributed to sluggish consumer procurement activities in both domestic and regional downstream markets. The availability of ample stock in the regional market, as participants had already stocked up in anticipation of increased demand in the previous month, also played a role in halting the momentum of commodity prices. The Aluminum sector's marginal demand and reduced production rates in the Alumina processing industry of China influenced the product's pricing for the week. Moving forward, shifting focus to container freight rates, the average November value of the Ningbo Container Freight Index (NCFI) rose by 8.8%, reaching 706.6 points in November 2023. This increase was attributed to an imbalance in supply and demand on the Asia to North America trade lane during November, preceding the Christmas and New Year holidays. As cargo shipments concluded, the container shipping market entered the off-season once again. Overall, the Caustic Soda Flakes FOB Tokyo in Japan recorded a price of USD 264/MT at the end of the quarter.
Europe
In Europe, Caustic Soda prices experienced an overall upward trajectory during Q4 2023, attributed to improved downstream orders from the aluminum processing and textile sectors. This positive trend was further supported by marginal relief from high-interest rates and eased inflationary pressures at the start of the quarter. The European downstream market showed signs of recovery in October 2023, driven by increased construction and infrastructure development activities. Government and private investors contributed to this recovery by allocating funds to construction projects. Amidst uncertainty in the market, some chlorine producers announced plant shutdowns, prompting Caustic Soda players to adopt a cautious approach, limiting production rates and causing prices to rise due to short supplies. The Caustic Soda pricing dynamics were influenced by short supply, escalating input costs, and a depreciating economy towards the termination of the quarter. Kem One, a significant player in the French chemical industry, strategically paused operations at its chlorine and Caustic Soda production facilities. The Lavera facility has an annual production capacity of 341,382 tonnes of chlorine and 333,373 tonnes of Caustic Soda, while the Fos facility produces 635,710 tonnes of chlorine and 2,202,200 tonnes of Caustic Soda annually. Conclusively, the elevation in the Caustic Soda prices mainly resulted from the supply constraints in the region during the fourth quarter of 2023. The Caustic Soda Flakes price was quoted at USD 412/MT, FOB Hamburg (Germany) in December 2023.
MEA
The Caustic Soda market was overall down in the MEA region during the fourth quarter of 2023 due to inadequate demand and ample supplies. However, the regional demand from the aluminum industry was moderate, contributing to the price increase in October 2023 amid short supplies. Moreover, input cost inflation, driven by higher energy prices, further pushed up the prices of Caustic Soda. In November 2023, the Saudi market observed a decline in Caustic Soda prices, attributed to sluggish consumer procurement activities in the regional downstream market. The oversupply in the regional market further contributed to a decrease in exports for the downstream alumina and cleaning industry. Additionally, export-oriented markets in Saudi Arabia faced weakened demand conditions, impacting their growth prospects and squeezing industrial profit margins. The second half of the quarter witnessed high supplies and reduced export inquiries, aligning with the downward Caustic Soda pricing dynamics. On the domestic front, purchases were made on a need basis, and consumer enthusiasm for Caustic Soda in downstream segments was average for the month. Recent analyses revealed that international consumers scaled back both purchasing and manufacturing production activities, presenting additional challenges for the market. As a result, these factors collectively delayed the price momentum of Caustic Soda in the fourth quarter of 2023.
South America
In the South American market, Caustic Soda prices exhibited resilience in Q4 of 2023, primarily driven by support from the downstream Alumina industry and constrained supplies. The tightening supplies and congestion at Brazil's main ports contributed to the continued strength in Caustic Soda prices. The nation entered its rainy season, leading to transportation issues and a shortage of supplies for the commodity. The Alumina segment's increasing downstream demand since September, coupled with easing interest rates and economic recovery, further fueled the price rise. Moving to December 2023, Caustic Soda prices in Brazil saw another increase amid a shortage of imports and a modest uptick in downstream demand from the Alumina and cleaning industry. Volatility in freight charges elevated the cost of importing cargo from Asian countries, resulting in constrained supplies and challenges in fulfilling current orders in the Latin American market. Facing a shortage of pre-procured stocks, market players opted to sustain margins by gradually raising prices. Globally, several sellers passed the additional cost burdens to buyers by increasing commodity prices in November. Meanwhile, in Brazil, the rate of charge inflation remained below input costs but reached a five-month high, surpassing its long-run average. This dynamic reflects the complex interplay of supply chain challenges, downstream demand, and external cost pressures influencing Caustic Soda pricing in the South American market.
