Caustic Soda Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

Market Overview

The caustic soda market size was estimated at over 85 million ton in 2020, and the market is projected to register a CAGR of less than 6% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. The coronavirus impact on chlorine derivatives demand has squeezed the supply of caustic soda, a by-product of chlorine production. This marks a reversal from the earlier scenario of a price cut that has been in place since 2019. However, to prevent COVID-19, the World Health Organization (WHO) has been encouraging people to wash hands with soap and water when hands are visibly dirty or soiled with blood, other body fluids, or after using the toilet. Such prevention of citing handwashing amid the continued spread of COVID-19 is a key factor for the market growth rate. Some of the companies in Europe started manufacturing soaps to meet the World Health Organization (WHO) guidelines (WHO), which is washing hands for 20 seconds to prevent the virus. For instance, Verve, an agency based across Dublin, London, and Amsterdam, developed the first soap lasting for exactly 20 seconds, the exact time it takes to get hands fully clean.

• Over the short term, one of the major factors driving the growth of the market is the rising demand for alumina in the transport sector. It is anticipated that 25% of the aluminum consumed in transportation may be used in road and rail commercial transport. Aluminum is used in the construction of passenger coaches for rail transport and manufacturing chassis. Additionally, in road transport, aluminum is used in the subframe designing of tankers and freight carriers.
• The increasing demand for paper and 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 processes and major environmental concerns are likely to hinder market growth.
• In 2020, due to the COVID-19 pandemic and lockdown, various pulp and paper producing plants had been kept under shutdown to cope up with the situation. This has negatively impacted pulp and paper production worldwide. This, in turn, affected the consumption of caustic soda in 2020.
• Plant capacity expansions and joint ventures in emerging and developed markets are projected to act as an opportunity for the market in the future.

Scope of the Report

Caustic soda is industrially produced through the electrolysis of brine solution. The major electrolytic production processes are membrane cell and diaphragm cell. The market is segmented on the basis of the production process, application, and geography. By production process, the market is segmented into membrane cell, diaphragm cell, and other production processes. By application, the market is segmented into pulp and paper, organic chemical, inorganic chemical, soap and detergent, alumina, water treatment, textile, and other applications. The report also covers the market size and forecasts for the caustic soda market in 16 countries across major regions. For each segment, the market sizing and forecasts have been done on the basis of volume (kiloton).

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Key Market Trends

Increasing Demand from the Soap and Detergent Segment

• Sodium hydroxide (NaOH), also known as lye, is an essential ingredient used in the manufacturing of soaps, cleaners, and detergents. Sodium hydroxide is widely used due to its ability to dissolve oils, grease, fats, and protein-based deposits.
• Caustic soda is used in the saponification process that converts vegetable oils into soap. It is used to manufacture anionic surfactants, a crucial component in most detergent and cleaning products.
• In modern detergents, sodium hydroxide is used to produce active agents or builders and household bleach products. Sodium hydroxide is also used in the production of sodium hypochlorite.
• Detergents are classified in terms of their ionic properties, namely, anionic, cationic, and non-ionic. The major applications of detergents are reflected in household cleaning and fuel additives.
• Detergents are primarily used in two main sectors, namely residential and commercial. The commercial sectors include the textile industry, hospitality industry, dry cleaning, and laundry services, whereas residential applications include its use in household cleaning. Liquid detergents offer ease of use and comfort and consume less wattage of electricity compared to powder detergent, which is driving the demand for caustic soda in liquid detergents.
• In 2019, detergents which include both liquid tablet detergents and liquid detergents, in China, were valued at USD 73 million and USD 3,789 million, respectively. Rising concerns of personal hygiene among the consumers after the coronavirus outbreak are positively impacting the demand for detergents, thus, stimulating the market for caustic soda.
• In soap production, sodium hydroxide is widely used to manufacture a variety of detergents used in homes and commercial applications. Chlor-alkali products are widely used for manufacturing soaps and detergents. However, due to the COVID-19 crisis, globally, manufacturers are witnessing a boom in demand for soaps and detergents.
• Additionally, detergent is an effective disinfecting agent for the novel COVID-19 pandemic. Clothes, unlike other hard surfaces, have layers, and viruses can easily settle down on the clothes. Researchers suggested leaving the clothes soaked in detergent for some time before washing may help to get rid of the virus.
• All the aforementioned factors are expected to drive the global market during the forecast period.

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