Caustic soda output declines over 2% in FY13

Steady demand from alumina, textile industries dragged prices lower

Caustic soda production fell by 2.1% in the financial year 2012-13 on steady demand from user industries like alumina and textile.

Data compiled by the rating agency Care Ratings showed that caustic soda output in India stood at 21.6 lakh tonnes in the financial year 2012-13 as compared 22.1 lakh tonnes in the previous year. Production of soda ash, remained flat at the previous year’s level of about 24 lakh tonnes in FY13.

In March 2013, production of caustic soda, however, increased by 7.8% m-o-m basis to 1.8 lakh tonnes. Even on a y-o-y basis, caustic soda output registered an increase by 3.6% in the month under consideration. Soda ash production also increased by 5.4% on a m-o-m basis in March 2013 to reach 2.1 lakh tonnes. However, on a y-o-y basis, soda ash production registered a decline by marginal 1% in March 2013.

Traders believe that the government’s decision to levy an anti-dumping duty on caustic soda and soda ash imports is set to keep their price in upward trajectory. Demand for soda ash would mainly be driven by buoyant consumption from key user industries like glass, soap and detergents. All these factors are likely to keep prices of soda ash firm in the domestic market in the near term, an analyst said.

Average price of caustic soda lye registered a decline by 7.5% on a m-o-m basis in the month of March 2013 to Rs 24.6 per kg. Price of caustic soda flakes also witnessed a drop of 3.9% on a m-o-m basis. On a y-o-y basis, price of caustic soda lye registered a decline by 12.8% whereas flakes price registered an increase by 8.6%. Average price of soda ash continued to remain stable on m-o-m basis at Rs 23.3 per kg in March 2013. However, on a y-o-y basis, soda ash price registered an increase of 13.5%.

Output (Lakh tonnes)
Financial Year	Caustic soda	Soda ash
2010	21.02	20.50
2011	21.68	22.90
2012	22.10	24.26
2013	21.6	24.17
Source: Care Ratings