Caustic soda prices fall 40% on cheaper imports from US

Caustic soda manufacturers are facing a tough time as prices of the commodity have fallen more than 40 per cent in the past one year due to the sudden surge in cheaper imports of caustic soda from US and sluggish domestic demand.

Caustic soda price declined to Rs 12,000-12,500 a tonne at present from Rs 20,000-21,000 a tonne a year back. Few industry players pegged the current price at Rs 10,000 a tonne. Various factors were responsible for the substantial erosion in prices of caustic soda, the prime factor being cheaper imports from US.

In the wake of recession, US-based manufacturers started dumping caustic soda in India at cheaper rates. “Caustic soda, which was quoted at around $500-600 a tonne in the international market, was exported to India at the rate of $30-40 as the demand dried-up in the US,” said Guruprasad Mohapatra, MD, Gujarat Alkalies and Chemicals Ltd. (GACL), the largest caustic soda manufacturer in the country.

As a result of lower international prices, the caustic import to India soared to 100,000 tonnes a month as against the normal monthly import of 10,000-15,000 tonnes. Invasion of cheap imports forced domestic players to cut prices.

Alarmed by the situation, caustic soda manufacturers approached the Union commerce ministry and demanded safeguard duty on caustic soda imports. The government imposed the duty in December. “Being a quasi-judicial process, it took four to five months for government to impose the duty. During the period, the dumping adversely affected the domestic prices,” added Mohapatra.