Caustic soda prices in China have been rising lately amid higher demand than supply

Caustic soda prices have been rising recently, Supply pressure was relatively high, and the production ramp-up fell short of expectations. This mismatch between supply and demand led to supply shortages in the market.

On the demand side, the alumina industry, which accounts for 30% to 40% of caustic soda consumption, was a primary driver of demand. As the alumina industry reached its production peak, the demand for caustic soda increased significantly. Additionally, demand from the papermaking, textile, and new energy industries also surged, further supporting the rise in caustic soda prices.

Rising production costs also contributed to the increase in caustic soda prices. As environmental protection regulations tightened, chemical companies were required to absorb higher environmental compliance costs during production, which were passed on to product prices. Furthermore, the rise in international oil and coal prices increased production costs for chemical companies, leading to higher caustic soda prices compared to previous levels.

Read More About Caustic Soda Production Cost Reports - Get Free Sample Copy in PDF

Speculative behavior and market sentiment in the futures market also impacted prices. Investors, anticipating higher demand for caustic soda, are buying future contracts in advance, which has been pushing prices upward.