Caustic Soda Procurement Intelligence: Trends to Watch

The caustic soda category is anticipated to grow at a CAGR of 5.1% from 2023 to 2030. In 2022, the category size was estimated to be valued at USD 40.6 billion with the Asia-Pacific region's dominance as a result of a rise in raw material industrial demand for textiles, paper, and other materials as well as manufacturing hubs. The category is escalated globally, owing prominently to its intense abilities and importance across both the residential sector & industries. It is a versatile compound that finds numerous applications across different industries from primary usage in detergents, packaging, and treatment to food, chemical, and automobile. Another factor fueling the category growth is its use in processes such as, making drugs and bauxite purification. Being a primary product for many industries, demand for it remains high, whether it is for parts of EV in cars or the water treatment business. The category is also widely utilized in the extraction of bauxite, and demand for it will rise parallelly as the region's production of aluminum rises.

An increase in innovation and development in production techniques would present potential sustainable growth opportunities for the category. When compared to caustic soda generated conventionally, Vynova renewable caustic soda has a much smaller carbon footprint, as it is manufactured using renewable electricity. It makes it possible for clients in a variety of industries to produce more environmentally friendly goods. Westlake's low-carbon caustic soda, sold under the trade name GreenVin, has a lower carbon footprint by more than 30% than standard Westlake Vinnolit caustic soda. Hamwha, a leading chemical company, increases the amount of caustic soda it produces for advancing and developing the usage of elements in sustainable transportation - specifically EV production.

With numerous suppliers and producers, from large multinational chemical firms to smaller regional or local businesses, the category is highly fragmented. Due to the variety of applications in the category, there are numerous niche markets created. Each industry has its own manufacturing capacity, distribution system, and consumer. The distribution of the categories is influenced by industry demand, economic situations, legal and regulatory frameworks, and technological development. In 2022, Asia Pacific accounted for a large portion of the market. China dominates both production and demand for caustic soda, as it does with so many other chemical products. It holds around half of the world's caustic soda manufacturing capacity. Shale gas output in the US has significantly increased recently, rising category demand.

Order your copy of the Caustic Soda Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Approximately 99.5% of caustic soda consumed worldwide is produced through the conventional chlor-alkali process. Raw materials, production volume, machinery, etc. are the cost components of the category. Energy usage also accounts for a sizable amount of variable costs. Prices for caustic soda increased globally, averaging USD 769/MT in the first quarter of 2023 compared to last year’s average USD 719/MT due to factors such as supply chain disruption and rising energy costs. Sales of caustic soda increased by 17% in Q1FY23 to 278,000 tonnes, with a utilization rate of 89%. Following Russia's invasion of Ukraine, China took over the role of Russia and Ukraine as suppliers of chlor-alkali products to Europe, which resulted in shortages in the Asian domestic market and an increase in local pricing. Due to the oversaturation of the market in Europe brought on by cheap imports from China, the prices remained lower in the region.

The category can be sourced from various methods, primarily through the domestic market.  Due to the simple accessibility of production's raw materials, many nations have domestic manufacturing facilities. It provides advantages like lower shipping costs, shorter lead times, and support for the local economy. As per the industry specification quality testing should be done to meet standards and requirements. Suppliers that demonstrate sustainable practices is another factor influencing sourcing intelligence.

Caustic Soda Procurement Intelligence Report Scope 

• Caustic Soda Category Growth Rate: CAGR  5.1% from 2023 to 2030
• Pricing growth Outlook: 2% - 3% (annual)
• Pricing Models: Spot pricing, Production and processing pricing, Quality standards pricing, Competition based pricing
• Supplier Selection Scope: Cost and pricing, Past engagements, Production capacity, Supply chain and Logistics
• Supplier selection criteria: Quality standards, production capacity, pricing, supply chain transparency, transportation and handling, technical specifications, operational capabilities, regulatory standards and mandates, category innovations, and others.
• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model

Key companies 

• Dow Chemical Company
• PPG Industries
• Hanwha Chemical Corporation
• INEOS Group
• Solvay SA
• BASF SE
• FMC Corporation
• Occidental Petroleum Corporation
• Formosa Plastics Group
• Tosoh Corporation

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends

• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships

• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions