Technavio Identifies Top Three Emerging Trends for the Global Caustic Soda Market Through 2020
By Business Wire News
By Business Wire News
Technavio’s latest global caustic soda market 2016-2020 report highlights the top three emerging trends that are predicted to impact the market through 2020. Technavio defines an emerging trend as something that has potential for significant impact on the market and contributes to its growth or decline.
Technavio’s senior market research analyst Chandrakumar B J, who specializes in non-alcoholic beverages says, “According to our research, the global caustic soda market accounted for more than 70 million metric tons in 2015 and is expected to grow at a CAGR of over 3% until 2020. The global caustic soda market is most likely to grow at a moderate pace throughout the forecast period because of the rising demand from various end-user industries like alumina, organics, inorganics, pulp and paper, soaps and detergents, and water treatment chemicals.”
Despite caustic soda being a crucial chemical in the processing of other chemicals, the market growth will be impacted by the chemical’s reactive nature and energy-intensive production process which can lead to environmental hazards. However, increased usage of caustic soda in regions like APAC and untapped markets of Africa is most likely to offer new avenues that will augment the demand for caustic soda over the next four years.
Technavio’s market research study identifies the following top three emerging trends for the global caustic soda market 2016-2020:
- Rise in caustic soda prices
- Expanding production capacity for caustic soda in US, Middle East and Asia
- Increasing impact of industrialization
Rise in caustic soda prices
Caustic soda prices have increased at an estimated average annual rate of 0.5% in the past three years. Manufacturers’ production costs have increased during this period as the price of utilities like energy and water has steadily grown. Electric power accounts for roughly 45% of revenue; hence, climbing electricity prices have boosted manufacturers’ production costs, applying upward pressure on prices. In recent months caustic soda operating rates have had to be cut back in Europe and Asia because of a force majeure on ethylene, causing caustic soda prices to rise. Caustic soda prices have risen in APAC because of increased demand from consuming industries amid short supplies. Apart from good demand from end-user industries, tight supplies from producing regions also pushed up caustic soda prices.
Increasing capacity expansion for caustic soda in US, Middle East and Asia
China remains the biggest caustic soda producer in the world with operating rates relatively lower than other parts of Asia, where availability and production of chlorine remains a key issue. However, the market is witnessing expansions in countries such as South Korea, Indonesia, and Vietnam. Asia remains the largest importer of ethylene dichloride (EDC) which is an indirect import of chlorine. The Middle East has also emerged as an attractive market for the production of caustic soda on account of low energy costs this region offers. Energy-rich Countries such as Saudi Arabia, Qatar, and Oman are likely to attract many new projects during the forecast period.
Increasing impact of industrialization
Larger-scale production has led to a substantial upsurge in the use of construction materials, chemical pulp, paper, textiles, cleaning chemicals, and several organic and inorganic chemicals. The increase of new techniques that use minimal amount of chemicals, but yield the same results, have encouraged the use of these chemicals. The use of caustic soda in aforementioned industries and end-user applications will continue to promote the global caustic soda market through the 2020 period.
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