Chemicals Update: US Caustic Soda Exports

US Caustic Soda Exports

Caustic soda is one of the most used chemicals with a variety of applications such as ores and metals processing, paper making, textile, food, and pharmaceuticals industries, to name a few. Over the past 10 years, the average annual globally traded volume of caustic soda has fluctuated between 14-16 million mt. This makes it one of the most traded chemical products, so it is worth taking a look at some recent developments in this market.

The US is a significant exporter of caustic soda, with nearly 30% of total output destined for international markets–with Latin America, particularly Brazil and Mexico, being the key destinations. Brazil alone takes in about 40% of US caustic soda exports and will likely remain a growing market for the product. Stable demand from the pulp/paper industry in Brazil and potential economic improvements will support increased US cargo flows to the region.

Average monthly volumes to other importers such as Chile, Jamaica, and Australia have remained around 30,000 mt for all of 2023 and YTD 2024. However, the latter may need less on recent and planned smelter shutdowns. On the other hand, despite expectations for growth, Mexico (which is another outlet for US caustic soda), is showing a declining trend as imported volumes have slipped during 2024 compared to the year before.

In the coming months, muted caustic soda production in the US will likely remain stable as increased chlorine production (due to increased US PVC exports) will offset a drop caused by muted domestic PVC demand. Latin America will remain the key outlet for US caustic soda, but other emerging markets in the Middle East and Africa may also be able to absorb US exports. High energy costs and ongoing geopolitical disruptions may lead to increased volumes exported to Europe as arbitrage opportunities open, especially with the ongoing tight European supply due to reduced nameplate capacity and recent plant outages.

By Plamen Aleksandrov, Head of Research – Chemicals, SSY.