Press release
Caustic Soda Market Article: Top Key Players 2018, Major Factor for Growth and Business Prospects 2023
How the present scenario looks like?Due to low production capacity additions by major players in Asia Pacific region, the prices for sodium hydroxide, used in aluminium smelting and paper production, are soaring in the Asian markets, as supply fails to keep up with rising demand, mainly in the emerging economies of the region. In China, the international aluminium price recovery has triggered a spike in demand for caustic soda for aluminium smelting. Large caustic soda manufacturers in the country are also raising the domestic prices amid faltering chlorine markets. In addition to this, manufacturing caustic soda using mercury will be banned starting in 2019 in response to stringent environmental regulations in the Europe region, which would further increase the price of caustic soda in the region. Overall, the price hike in overseas market is expected to provide the Middle East & Africa manufacturers with a strong incentive to export the caustic soda in the Asia Pacific and other regions across the globe.
Where is the business opportunity?
As the cost of manufacturing of caustic soda is very high, manufacturers are constantly looking for new and efficient technology which can consume low electricity and reduce the cost of production. At present, the most cost-competitive technology is the membrane cell technology. Primary advantage of a membrane cell-based process is that the overall plant process requires less energy than mercury or diaphragm cell-based processes. This can help a plant lower its overall operating costs by around 6%. Moreover, membrane cells can produce a highly pure grade of caustic soda. However, additional caustic soda concentration steps must be provided during the process, leading to additional energy steam requirements. Similar process steam usage in a diaphragm plant is almost three times what it is in the membrane plant as a result there is growing opportunity for manufacturers to produce caustic soda by membrane cell-based process.
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What should be the business strategy?
The global caustic soda market is at a growing stage, which represents a moderate statics in terms of market value and overall volume. Over the past few years, the caustic soda market has witnessed an incremental demand from industries like inorganic chemical, organic chemical, alumina and pulp & paper. Nevertheless, the degree of competition among the market players is still moderate, owing to limited major market players across the globe. Globally, market for caustic soda is fragmented in nature and it is moving towards growth expansion by specifically adopting partnership, expansion, joint-venture and product launch strategies. However, expansion is the primary business strategy applied by the key caustic soda manufactures. Acquisition is the second go-to strategy used by the manufacturers to increase their market share in global caustic soda market.
So, what may restrain the caustic soda market?
Caustic soda production is energy intensive, with electricity costs typically accounting for 40–50% of operating production costs. Electricity consumption in overall process depends on different technology used in caustic soda production. Most chlor-alkali (caustic soda + chlorine) is produced by electrolyzing a solution of brine using membrane, diaphragm or mercury cell technologies. Energy required for the production of caustic soda using this technology is very high however the profit margin is very less that may restrain the global market. In addition to this, the impact of emissions during caustic soda manufacturing and its subsequent impact on human health and environment has created problems for caustic soda manufacturers due to strict environment regulations in many regions, which in turn may hamper the market growth severely.
Chlorine growth projections is also one of the other key issues for many regions, especially Asia Pacific region. Looking at growing consumption of caustic soda, increase in operating capacity are being seen, e.g., in South Korea, Indonesia, Vietnam, etc. Asia Pacific remains the largest consumer of the caustic soda but what to do with domestic chlorine produced as a co product of caustic soda manufacturing process remains a challenge in the region. In addition to this, another challenge is to reduce Iodine and total organic carbon in brine use for caustic soda process these factors may restrain the global caustic soda market in future.
Recent Trends in Caustic Soda:
Growing trend of use of aluminium in transport sector supported by the increased vehicle sales and higher aluminium intensity in the production of trains and new vehicles in Asia Pacific region is observed in past few years. This results in the increasing use of caustic soda in alumina production as hot solution of caustic soda is the key chemical required for separation of alumina from bauxite in aluminium industry. In addition to this, growing trend of use of caustic soda for pulp cooking is observed across the globe due to growing use of paper in the teabags, tissue paper, photo-copying paper, heavy cardboards and packaging. The trend of use of caustic soda in alumina and pulp & paper industry is expected to remain continue in near future due to growing automotive production units and paper demand across the globe.
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