Caustic Soda Market - Growth, Trends, COVID-19 Impact, and Forecast (2021 - 2026)

The Caustic Soda Market is segmented by Production Process (Membrane Cell, Diaphragm Cell, and Other Production Processes), Application (Pulp and Paper, Organic Chemical, Inorganic Chemical, Soap and Detergent, Alumina, Water Treatment, Textile, and Other Applications), and Geography (Asia-Pacific, North America, Europe, South America, and Middle-East and Africa).

Market Snapshot

Caustic Soda Market Overview
Study Period: 2016-2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: Asia Pacific
CAGR: <6 %
Caustic Soda Market Major Players

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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).

Production Process
Membrane Cell
Diaphragm Cell
Other Production Processes
Application
Pulp and Paper
Organic Chemical
Inorganic Chemical
Soap and Detergent
Alumina
Water Treatment
Textile
Other Applications
Geography
Asia-Pacific
China
India
Japan
South Korea
Rest of Asia-Pacific
North America
United States
Canada
Mexico
Europe
Germany
United Kingdom
Italy
France
Rest of Europe
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
Saudi Arabia
South Africa
United Arab Emirates
Rest of Middle-East and Africa

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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.
Caustic Soda Market Trends

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. According to the International Monetary Fund (IMF) projections, the Chinese GDP growth declined to 1.9% in 2020 due to the COVID-19 outbreak in the country. It is expected to recover and reach 8.2% by the end of 2021.
  • China is both the largest producer and the largest consumer of caustic soda in the world.
  • China is the largest pulp and paper producing nation in the world as a result of its large forest reserves (22.5% of its 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 present.
  • China is a hub for chemical processing, accounting for a major chunk of all chemicals produced globally. With the growing demand for organic and inorganic chemicals around the world, the demand for caustic soda from this sector is projected to grow during the forecast period.
  • According to the Ministry of Housing and Urban-Rural Development, the number of wastewater treatment plants in China increased to about 3,700 plants in 2019, with a total treatment capacity of roughly 190 million m3/d.
  • China is the largest textile producing and exporting country in the world. With its rapid growth over the last two decades, the Chinese textile industry has become one of the main pillars of the country’s economy and contributes ~7% to the country’s GDP. Low cost of production, high availability of labor, reduced commercial barriers, and material supply availability are a few of the competitive advantages that the country offer for the clothing manufacturing industry.
  • China is the largest clothing producer in the world and has the largest production capacity for textile products, consisting of cotton, human-made fibers, and silk.
  • With the growth in the pulp and paper, textile, and chemical processing sectors, the demand for caustic soda is expected to increase in the country in the upcoming years.
Caustic Soda Market Growth

Competitive Landscape

The caustic soda market is partially fragmented in nature. Some of the key players in the market include Occidental Petroleum Corporation, Shin-Etsu Chemical Co. Ltd, Dow, SABIC, and Formosa Plastics Corporation.

Recent Developments

  • In April 2019, INOVYN announced its intent to deliver a major expansion project in Rafnes Site, Norway. The project expansion includes the investment for an additional 35-kilo-metric-ton-per-annum of membrane ECU capacity of caustic soda to be supplied to the customers in Scandinavia. The company expects additional ECU volumes to be available from 2020.
  • In March 2019, BorsodChem successfully started the production of chlor-alkali at its new membrane chlorine plant at Kazincbarcika, in Hungary. The initial run took place following the successful commissioning of the new plant, which was announced in 2014. The building of this new membrane plant and the shutdown of the pre-existing mercury-based chlor-alkali production was a part of the Europe-wide phasing out of the latter, under the EU Industrial Emissions Directive.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Drivers

      1. 4.1.1 Rising Demand for Alumina in the Automotive Industry

      2. 4.1.2 Increasing Demand for Soap and Detergent

    2. 4.2 Restraints

      1. 4.2.1 Energy-intensive Production Process

      2. 4.2.2 Unfavorable Conditions Arising Due to the COVID-19 Outbreak

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Bargaining Power of Suppliers

      2. 4.4.2 Bargaining Power of Consumers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products and Services

      5. 4.4.5 Degree of Competition

    5. 4.5 Import and Export Trends

    6. 4.6 Price Trends

    7. 4.7 Major Plants and Upcoming Capacities

    8. 4.8 Caustic Soda Production Analysis

      1. 4.8.1 Production Process Analysis

      2. 4.8.2 Production Cost Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Production Process

      1. 5.1.1 Membrane Cell

      2. 5.1.2 Diaphragm Cell

      3. 5.1.3 Other Production Processes

    2. 5.2 Application

      1. 5.2.1 Pulp and Paper

      2. 5.2.2 Organic Chemical

      3. 5.2.3 Inorganic Chemical

      4. 5.2.4 Soap and Detergent

      5. 5.2.5 Alumina

      6. 5.2.6 Water Treatment

      7. 5.2.7 Textile

      8. 5.2.8 Other Applications

    3. 5.3 Geography

      1. 5.3.1 Asia-Pacific

        1. 5.3.1.1 China

        2. 5.3.1.2 India

        3. 5.3.1.3 Japan

        4. 5.3.1.4 South Korea

        5. 5.3.1.5 Rest of Asia-Pacific

      2. 5.3.2 North America

        1. 5.3.2.1 United States

        2. 5.3.2.2 Canada

        3. 5.3.2.3 Mexico

      3. 5.3.3 Europe

        1. 5.3.3.1 Germany

        2. 5.3.3.2 United Kingdom

        3. 5.3.3.3 Italy

        4. 5.3.3.4 France

        5. 5.3.3.5 Rest of Europe

      4. 5.3.4 South America

        1. 5.3.4.1 Brazil

        2. 5.3.4.2 Argentina

        3. 5.3.4.3 Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. 5.3.5.1 Saudi Arabia

        2. 5.3.5.2 South Africa

        3. 5.3.5.3 United Arab Emirates

        4. 5.3.5.4 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Market Share (%)**/Ranking Analysis

    3. 6.3 Strategies Adopted by Leading Players

    4. 6.4 Company Profiles

      1. 6.4.1 Arkema

      2. 6.4.2 Covestro AG

      3. 6.4.3 Dow

      4. 6.4.4 Formosa Plastics Corporation

      5. 6.4.5 Grasim Industries Limited

      6. 6.4.6 Hanwha Solutions/Chemical Corporation

      7. 6.4.7 INOVYN

      8. 6.4.8 Kemira Oyj

      9. 6.4.9 Occidental Petroleum Corporation

      10. 6.4.10 Olin Corporation

      11. 6.4.11 SABIC

      12. 6.4.12 Shin-Etsu Chemical Co. Ltd

      13. 6.4.13 The Sanmar Group

      14. 6.4.14 Westlake Chemical Corporation

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Caustic Soda Market market is studied from 2016 - 2026.

The Caustic Soda Market is growing at a CAGR of <6% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

Occidental Petroleum Corporation, Shin-Etsu Chemicals Co. Ltd, Dow, SABIC, Formosa Plastics Corporation are the major companies operating in Caustic Soda Market.

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