Global Chloralkali Market Demand & Forecast Analysis, 2016-2032

In a chlor-alkali industry, for every 1 ton of Chlorine, 1.1 ton of Caustic Soda and 0.03 ton of Hydrogen is produced. This product combination is called an Electrochemical Unit (ECU). The chlor-alkali is an energy intensive industry with energy cost accounting for around 45% of the total cost of production.

Caustic Soda is a white ionic compound also known as sodium hydroxide (NaOH). The production of caustic soda is dependent on production of chlorine as it is a co-product of chlorine in the chlor-alkali process. Sodium Chloride (NaCl) is electrolysed to form chlorine which is primary product and caustic soda is produced as the secondary product. Chlor-alkali is mainly produced using membrane cell technology and the other commercial technique used is diaphragm cell technology.

EDC/PVC and Chemicals, both organic and inorganic together account for 56% of the total chlorine demand. All other applications like C1/C2 Aromatics, Chlorinated Intermediates, Isocyanates, Propylene Oxide, Pulp & Paper, Water Treatment and other together account for 3% to 8% each.

Chlorine is highly reactive gas with strong oxidizing property. Chlorine is manufactured using sodium chloride (NaCl) solution. NaCl solution is conductive and hence it is fed into membrane cell to give chlorine gas and sodium hydroxide as a by-product. Chlorine acts as a major source for production of vinyl polymers such as polyvinyl chloride (PVC). The demand for chlorine is directly dependent on the consumption patterns of plastics and other chlorinated aliphatic & aromatic products. Asia-Pacific dominates the demand for chlorine with around 50% market share followed by North America and Western Europe. Growth in plastics and chemical industries will drive the chlorine market in Asia-Pacific market. Globally, a significant portion of the demand for chlorine is from the Vinyls industry and EDC/PVC are expected to be the most attractive market for chlorine followed by other applications like intermediates and chemicals.

There aren t many new chor-alkali capacities planned in the North American region and it is estimated the region will remain in deficit during the forecast period. EDC/PVC and chlorinated intermediates are the major applications in the region. In the South American region, the chemicals industry is accounts for a large share of regional chlorine demand. The Western European region has been more or less self-sufficient and in the short to mid-term, there may be some opportunity as mercury based plants completely phase out and new technologies like production of chlorine from HCl emerge.

Caustic soda has a wide range of application with alumina production being the top consumer of caustic soda having around 20% market share. Other applications include organic chemicals, food, soaps and detergents, textiles, water treatment and steel/metallurgy - sintering. Asia pacific dominates the caustic soda demand followed by North America and Western Europe. Demography of the region is an important indicator for caustic soda consumption as it is a bulk commodity chemical, used in various day-to-day applications.

According to Prismane Consulting s integrated Chlor-alkali market model, most of the chlor-alkali capacities are concentrated in Asia-Pacific especially China. It is further estimated that China will increase its market share in exports during the forecast till 2025. The global Chlor-alkali industry is expected to grow at an annual average of 2% to 2.5% in the long-term forecast.