The prices of caustic soda have been rising exponentially in India since October. The prices in the starting of the month of October were at INR 40200 per tonne. The prices started to shoot up by the first week of October itself with the prices being INR 47450 per tonne on October 8. The upwards trajectory took more boost when the prices reached a high of INR 50850 per tonne in the mid of October. The prices have continued to rise since then and the current prices on November 12 are INR 76100 per tonne.

The price rise can be attributed to firm demand from downstream industries such as glass and pulp and paper. The prices have gone up at an exponential rate as the domestic production is deemed slow and consumption in the downstream sectors have gone up. On the supply side the pressure has been building because the exports to USA have increased and the imports from Bangladesh have decreased considerably. With the rise in the supply pressure and firm demand fundamentals, the prices were expected to rise but the rise in the prices have been far from the expectations.

Caustic soda is a product of the chlor alkali process and is used in industries such as glass and pulp and paper. The overall demand of caustic soda in India stood at 3.43 million tonnes in the FY2021 and the demand is expected to grow at a healthy CAGR of 5.43% during the upcoming years till FY2030.

As per ChemAnalyst, “the prices of Caustic soda which have been rising exponentially in India for the past month are expected to continue the upward rally as the exports to USA are increasing and the imports are decreasing which has created a supply pressure. With the demand being strong from the downstream and the economy reviving from the coronavirus related lockdowns, a price stabilization seems far away in the upcoming month.”