Market Overview

The market for caustic soda is anticipated to register a CAGR of around 6% during the forecast period. One of the major factors driving the growth of the market is the rising demand for alumina in the automotive industry.

  • The increasing demand for paper & paperboards is also expected to increase the consumption of caustic soda, to extract aluminum from its ores, thereby augmenting the growth of the market.
  • Energy-intensive production process and major environmental concerns are likely to hinder the market growth.
  • Plant capacity expansions and joint ventures in emerging and developed markets are projected to act as an opportunity for the market, in the future.



Key Market Trends

Increasing Demand from the Pulp and Paper Industry

  • Caustic soda is used in the pulp & paper industry mostly for digesting wood to make wood pulp, and as a bleaching agent for neutralizing bleached pulp and paper. It is also used for deinking of waste papers.
  • Caustic soda is available in solid, flake, or powder form, while its water solution is mostly used by the pulp & paper industry. Commercially, equivalent to 98% NaOH is quoted on a 76% sodium oxide (Na2O) basis.
  • In Asia-Pacific, China and India are the major markets for pulp and paper production, while in Europe, Sweden and Finland accounted for approximately 60% of the European pulp production.
  • In North America, there are over 110 pulp mills in the United States and Canada combined, which consume over 3 million metric ton of caustic soda per year.
  • All the aforementioned factors are expected to drive the global market during the forecast period



China to Dominate the Asia-Pacific Region

  • In Asia-Pacific, China is the largest economy, in terms of GDP. The growth in the country remains high, but it is gradually diminishing as the population ages and the economy is rebalancing from investment to consumption, manufacturing to services, and external to internal demand.
  • China is the largest producer, as well as consumer of caustic soda. Additionally, the country is the largest largest pulp and paper producing nation in the world, as a result of its large forest reserves (22.5% of the land area).
  • The industry is modern and highly mechanized, and the labor is cheap. Forest cover is increasing in China, owing to government afforestation initiatives. While this is a positive sign, there are concerns regarding social and environmental issues. As the largest wood importer in the world, with complex and opaque supply chains, significant challenges are also present.
  • With the growth in the pulp and paper industry, coupled with the rising demand from other sectors, the consumption of caustic soda is expected to increase in the country, in the upcoming years.



Competitive Landscape

The caustic soda market is partially consolidated. In terms of market share, few of the major players currently dominate the market. Key players in the caustic soda market include Akzo Nobel NV, Occidental Petroleum Corporation, Arkema, Covestro AG, Dow, Shin-Etsu Chemicals Co. Ltd, SABIC, Solvay among others.

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