Caustic Soda Market Fluctuates: China Slashes Exports, Indonesia to Launch New 400,000-Ton/Year Plant
Caustic Soda Market Fluctuates: China Slashes Exports, Indonesia to Launch New 400,000-Ton/Year Plant
Caustic soda prices in Asia are under significant downward pressure amid weak demand and an increasingly abundant supply. Two key factors shaping the current supply–demand landscape are China’s declining export trend and Indonesia’s upcoming launch of a mega caustic soda plant with a capacity of 400,000 tons per year.
China Cuts Exports Due to Weak Domestic Demand
China’s caustic soda exports in May dropped by 24% compared to the previous month, with a drastic 66.4% plunge in shipments to Australia — one of its major customers.
The primary reason lies in softening domestic demand, both in alumina-related and non-alumina sectors. Alumina refineries have already stocked sufficient inventory, while non-alumina industries are entering a seasonal lull. As a result, many Chinese suppliers are either suspending exports or adjusting pricing strategies.
Indonesia to Inject Major Supply With 400,000-Ton/Year Plant
Regional supply pressure will intensify as Indonesia’s Chandra Asri Group announces the imminent commissioning of a new chlor-alkali and ethylene dichloride complex, with a production capacity of 400,000 tons of caustic soda per year.
This move is aimed not only at reducing Indonesia’s reliance on imports but also at supporting its long-term petrochemical industry development strategy. However, in the short term, Southeast Asia will need to absorb this significant influx of supply — at a time when demand from countries like Vietnam, Thailand, and the Philippines remains stagnant.
Outlook and Implications
The Asia-Pacific caustic soda market is undergoing a sharp adjustment. While China gradually retreats from short-term export activities, Indonesia is poised to unleash a large wave of supply, intensifying price competition across the region.
Nonetheless, this turbulence is expected to be short-lived, as the real impact will hinge on buyer-side demand — especially from Southeast Asian markets.
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