The Caustic Soda market in Europe was estimated to be around 13,150 kilo tons in 2022 and it is further poised to reach 15,500 kilo tons by 2032, growing at a CAGR of 1.8% during 2023-2032 

Caustic Soda (Sodium Hydroxide) is an inorganic chemical compound with the molecular formula NaOH. It is also commonly known as Caustic Soda and Lye. At room temperature, pure NaOH is a colourless crystalline solid containing sodium cations Na+ and hydroxide anions OH-.  It is a widely used industrial chemical that is known for its corrosive and alkaline properties. Sodium hydroxide is readily soluble in water, has lower solvability towards polar solvents such as ethanol and methanol, and is insoluble in non-polar solvents such as ether. It has the tendency to absorb moisture from the air. Currently, caustic soda is produced commercially through the chlor-alkali process. It was initially produced through the Causticizing process and was substituted by the Solvay process. The Solvay process was replaced by the Leblanc process and then the chlor-alkali process. Caustic Soda is a versatile chemical that finds its application in a wide range of industries such as pulp & paper, alumina, soaps & detergents, inorganic & organic chemicals, food, textiles, water treatment, metal processing & mining.

Europe including Western and Central Europe is one of the leading producers of Caustic soda accounting for more than 15% of the global installed capacity. Western Europe is the biggest Caustic soda producer with installed capacity of around 11,800 kilo tons in 2022. It is projected that an average of 200 kilo tons of additional capacity will be added during the forecast period. In Europe, Dow is the biggest caustic soda producer accounting for around 25% of the regional capacity followed by INOVYN at 22%.

Western Europe has witnessed several capacity shutdowns and technology transfers in the past decade. Many plants in the region are now producing caustic soda using membrane cell technology. Other than this technology, some plants are employing diaphragm cells or other technologies for caustic and chlorine production. Due to strict environmental regulations and government norms set in the region, mercury cell technology-based plants either have been shut down or converted to membrane cell technology by 2018. Capacity utilization rates averaged 85% in the region between 2016 and 2021. Caustic Soda demand in Western Europe has been estimated to be over 9,000 kilotons in 2022 and it is further poised to grow at a CAGR of 1.5% between 2023-2032 on the back of strong demand of Caustic soda from Organic chemicals, Inorganic chemicals, Food, Pulp & Paper and other application.

Germany has been leading the Western European Caustic soda market in terms of installed capacities with its share of over 50% in 2022. Dow, Covestro, Vinnolit, Nouryon, Evonik, Westlake Vinnolit and others are key caustic soda producers in Germany with a combined capacity of 5,997 kilo tons. Covestro and Dow are the biggest Caustic soda producers in Germany with installed capacity of 3,582 kilo tons translating to around 60% of the total capacity in the country. Germany is a major caustic soda exporter in Western Europe with average export of more than 3150 kilo tons between 2016-2021. In the long-term forecast, the country is expected to be a net exporter with no new major capacity addition in the coming years.

Germany is leading consumer for caustic soda accounting for 30% of market share in Western Europe and expected to be a major Caustic Soda producer throughout the forecast period. The Caustic soda demand is estimated to grow at a CAGR of 1.1% to reach 3294 kilo tons by 2032. After Automotive and machinery equipment, Chemicals and Pharmaceuticals in the third largest industry in Germany, with an annual turnover of EUR 227.1 billion in 2021, according to the European Chemical Industry Council (CEFIC). As per statistics from the association, around 80% of chemical and pharmaceutical companies in the country spend on research activities, with the total R&D spending totalling EUR 13.2 billion in 2021. The country faced significant headwinds in 2022, with the energy crisis following the war that affected raw material supply and prices and caused logistical disruptions. Costs went up and production declined compared to the previous year. Alternate production sources, improving conditions and fiscal policies being introduced by the administration is expected to help the country better face the challenges that lie ahead for the country in 2023. Alumina production in Germany was estimated by the U.S. Geological Survey to be 900 kilo tons in 2021. Caustic soda consumption for alumina production in the country stood at 172 kilo tons, expected to grow with a compounded annual growth rate of 0.6% to reach 185 kilo tons in 2032.

Central & Eastern Europe region accounts for less than 5% of the global caustic soda capacity. Historically, the region was a net exporter of caustic soda until 2008. In 2009, the region turned to being a net importer of caustic soda. Imports account for around 40% of the regional caustic soda demand. Central & Eastern Europe has installed capacities of around 3,700 kilotons of caustic soda with an average utilization rate of 72% between 2016-2021. Hungary, Romania and Ukraine are major countries in the Rest of Central & Eastern Europe together accounting for over 75% of the production capacity in Rest of Central & Eastern Europe. Borsodchem, Chimcomplex and Khimprom are key players in the Rest of Central & Eastern Europe. Total capacity in the Rest of Central & Eastern Europe is estimated to be around 1477 kilo tons with average operating rate in lower 80’s.