Chlor Alkali Sector Experiencing Skyrocketing Price Rises in Asia

The prices of Chlor Alkali products including Caustic Soda, Soda Ash, and Chlorine have been experiencing high price rise this year. The prices of Caustic Soda in October have reached $210 per tonne in the Asian markets which is almost 160% high as compared to prices in the mid of the year. Similarly, the prices of light Soda Ash have reached an alarming of $489 per tonne which is almost $198 higher than prices in the mid of the year.

The reasons for high prices is tight supply and firm demand. The supply has been tight in China due to the impact of the control policy. The companies have been stopping production or are working at lower operating rates. Additionally, the operating rates have been affected by the environmental protection inspections, and recent power outages in several factories.

The demand has been bullish from various sectors in such as construction and cleaning both of which are reviving from the shock of coronavirus pandemic. The demand is particularly high in countries such as India.

Chlor Alkali products are manufactured during the chlor alkali process. The products include Caustic Soda, Soda Ash, liquid Chlorine, and Hydrochloric Acid. These chemicals have applications in various sectors including construction, cleaning, glass, pulp and paper etc. The demand for Chlor Alkali products stood at around 245 million tonnes in 2020 and is expected to grow at a CAGR of 4% during the upcoming years.

As per ChemAnalayst, “the rising prices of Chlor Alkali products are driven by supply crunch in China, once the supply from China returns to normal, the prices are expected to return to mid-year levels. The demand is particularly firm in countries such as India and the demand is expected to remain high due to the growing construction sector.”