Muted Pharma, Alumina Demand Weighs on Caustic Soda Market; Prices Decline

Key Highlights

• CS Flakes now range between ₹42–₹44/kg; Lye at ₹38–₹39/kg
   
• Downstream demand remains weak from pharma and alumina industries
   
• Sreyas Industries’ full-capacity operations increase market supply
   
• JIT buying advised amid bearish sentiment and oversupply

Latest Domestic Price Updates

• The domestic Caustic Soda Flakes market saw a decline of ₹2.00/kg today. The latest prices and terms from various domestic manufacturers, through their authorized dealers, are as follows:
• TGV Make CS Flakes: ₹42.00/kg ++, Ex-Kurnool (advance payment terms)
• GACL Make CS Flakes: ₹43.50/kg ++, Ex-Dahej
• Andhra Sugars Make CS Flakes: ₹44.00/kg ++, Ex-Rajahmundry (advance payment terms)
• Grasim Industries: ₹43.00/kg ++, Ex-Kakinada (advance payment terms)
• Chemplast Sanmar: ₹44.00/kg ++, Ex-Karaikal, Tamil Nadu (advance payment terms)

Additionally, Caustic Soda Lye prices dropped by ₹2.00/kg. Updated rates are as follows:

• Ex-Dahej: ₹39.00/kg ++
• Ex-Hyderabad: ₹38.00/kg ++
• Ex-Chennai: ₹39.00/kg ++
• All quoted prices are based on advance payment terms.

The price correction is largely attributed to weak demand from the pharmaceutical (bulk drug) and food and beverage sectors.

Demand-Supply Trends Across Sectors

• Local supply remains ample, driven by reduced offtake from downstream industries. Major consuming sectors such as aluminium and pharmaceuticals have witnessed a notable drop in demand.
• Aluminum production has declined, reportedly due to bauxite shortages, according to a market participant.
• The bulk drug segment is experiencing a slowdown as well, linked to weaker production levels.
• In contrast, marginal improvement was observed in the dyestuff, paper & pulp, and soap & detergent sectors during June 2025. These segments are projected to remain stable through July, according to bulk buyers.
• India’s total monthly demand for Caustic Soda Flakes and Lye is estimated at approximately 334 kt, distributed as follows:
  1. Chemical manufacturers, pharma & sodium methoxide: ~94 kt/month
  2. Soap and detergent manufacturers: ~61 kt/month
  3. Paper and pulp industries: ~51 kt/month
  4. Alumina industries: ~34 kt/month
  5. Other downstream industries (including food processing, breweries, textile processing, dyestuffs, etc.): ~96 kt/month
• The recent entry of Sreyas Industries Ltd on the East Coast and their aggressive market penetration has further contributed to bearish market sentiment, a trader noted.

Market News: Market Disruption from New Entrant

• On the global commodities front, crude oil benchmark WTI prices declined by 0.44% to $65.23 per barrel, while natural gas prices recorded a sharp fall of 4.37%, closing at $3.57/MMBtu.
• Sreyas Industries Ltd, a new entrant located in Srikakulam on India’s East Coast, is currently operating at full capacity. The plant has an installed caustic soda production capacity of 154,395 TPA.

Expert Insights: Prices Under Continued Pressure, JIT Strategy Recommended

• Caustic Soda Flakes and Lye prices are expected to remain under pressure in the near term, owing to surplus domestic production and continued weak demand from the pharma and alumina sectors.
• However, steady demand from the textile, dyestuff, and paper & pulp industries is likely to offer some support and prevent a sharp downturn.
• Overall sentiment remains bearish. Industry participants are advised to follow a just-in-time (JIT) purchasing strategy rather than building up inventories at this stage.