Chinese Caustic Soda Prices Drop as Supply Outstrips Demand

Chinese Caustic Soda Prices Drop as Supply Outstrips Demand

Supply: Many liquid caustic soda plants undergo maintenance in June, reducing supply. This is the peak maintenance period of the year. Additionally, summer has increased electricity costs, affecting the low operating rates of caustic soda plants.

Demand: Caustic soda consumption in Indonesia rose in June as the nickel and alumina industries increased production capacity. Meanwhile, a major alumina plant in Shandong, China, actively stockpiled goods, keeping caustic soda demand stable.

Freight Rates: Shipping rates from Asia to the U.S. West Coast in Week 21/2025 surged by 13.58% compared to the previous week, reaching $2,970/FEU. According to Xeneta data, this rate is up 6.34% from last month. Demand on the Asia-North America route has risen sharply and is expected to continue growing throughout Q2 due to the temporary reduction in U.S. tariffs on Chinese exports and the upcoming peak season.

Overall: During this period, prices were primarily influenced by supply conditions.