Caustic Soda Market: Everything You Should Know


By 2020, the global caustic soda market is predicted to reach the value of $ 38,481 million with a CAGR of approximately 6.9 percent. The demand for caustic soda will be further driven by the growth of the textile market in developing countries. Some other industries such as pulp & paper, soaps, detergents, and aluminum industry will also add to the growing demand for the caustic soda market.

The Asia Pacific region is the biggest market for caustic soda with India and China leading the consumption. This region is witnessing several mergers and acquisitions amongst the various suppliers of caustic soda, making the Asia Pacific region a potential growth market. After Asia Pacific, North America is the leading consumer for caustic soda through chemical, food, pulp, and paper as well as various other industries.

In terms of quantity, the global caustic soda market has been estimated at 78,830 kilo tons and is expected to increase at a CAGR of approximately 5 percent by 2023.

What is Caustic soda?

Caustic soda is an inorganic compound of sodium, hydrogen, and oxygen formulated as NaOH. Its chemical name is sodium hydroxide. The applications of caustic soda are wide. Caustic soda is used in the manufacturing of glass, ceramics, cosmetics, and paints. The paper & pulp and textile industry are amongst the major users of caustic soda. The water treatment industry, bleaching industry and soaps & detergents industries also contribute to the caustic soda market.

Market analysis and size

India is amongst the leading producer of caustic soda globally, following China. The expansion of companies like DCM Shriram and Grasim industries are adding to India’s caustic soda capacity which is expected to reach 4 MMT by 2019. To match the consumer demand, many Indian producers and industries are expanding their capacities at very high rates of almost 90 percent. Grasim industries has increased its production capacity by 68 percent to 356,000 tons/year. Many others such as GACL and NALCO are also going to increase their plant capacity till 2020.

The textile industry was the largest consumer of caustic soda in 2017 followed by the aluminum smelting industry and paper & pulp industry. Growth in the automobile industry is also creating demand for caustic soda.  Soaps, detergents, water treatment, inks, and dyes are other industries that utilize caustic soda for various processes.

Growth Drivers and Constraints

The rapidly expanding textile industry in India will drive the demand for caustic soda in the country. 20 percent of the caustic soda market in India is made up by the textile industry. By 2020, the textile market is predicted to reach $230 billion that will fuel the caustic soda demand in India. Also, the growth and development of the automobile industry will lead to higher demand for aluminum that will further fuel the demand for caustic soda.

There are certain constraints that will impede the progress of the caustic soda market. China is the major producer for caustic soda globally. The rising domestic consumption and new environment policy of the government have reduced the caustic soda exports from China. The growing awareness about environmental hazards of caustic soda has led to restrictions being placed on its production and usage across Europe and North America.

There are some serious challenges facing the global caustic soda market due to a reduction in supply from all major regions including Asia Pacific, Europe and North America. It is yet to be seen how the industry will react to these developments.

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