Global Caustic Soda Prices Ease in April 2023 Owing to Demand Slowdown

At the termination of April 2023, the Caustic Soda producers maintained price stability due to low support from the downstream Alumina, textile, and cleaning industries across the globe. Moreover, a pullback in energy prices provided some relief in the input pressure on the Caustic Soda market players this week.

The slowness influenced European Caustic Soda prices in the downstream consumption in Alumina manufacturing and other downstream derivatives markets. Despite the moderation in energy prices, domestic Alumina production has declined in Europe, as primary production has shifted to Asia, impacting the Caustic Soda demand in the European region. A substantial portion of the curtailed European capacity of Caustic Soda has been returned to operation, and increased stock levels in exchange warehouses amidst weak end-user demand. The manufacturers were concerned about the rising stock levels and, as a result, stabilized the prices in the week ending April 28, 2023, keeping an eye on the market dynamics and inflation rate in the European market.

Traders have reported that the Caustic Soda prices remain down due to ample inventories in the European market. Moreover, freight prices have declined, and the European market is not encountering significant competition from the Asian market, as downstream, Aluminium units from the Middle East, India, and other regions are being imported to Europe. The Caustic Soda market is experiencing a weak demand from Aluminium manufacturers in April, even from the most reliable end-users.

In the USA, Dow Inc., a leading Chlor Alkali chemicals manufacturer in the US, reported lower financial performance in the first quarter of 2023, contributing to the current Caustic Soda price drops amidst a slowdown in the global economy. The decline in sales and profits due to challenging macroeconomic conditions affected the company's overall performance. The downstream sectors, such as the cleaning and Alumina manufacturing industries, have been influenced by supply chain disruptions and inflationary pressures and conclusively impact the profitability of companies.

As per ChemAnalyst, the volatility in the upstream energy settlements and tightness in the global inquiries are expected to impact the pricing dynamics of Caustic Soda in May 2023 in the global market