News and Articles

• US caustic soda rose about 3.7% after Strait of Hormuz disruptions.
• Roughly three dozen force majeure declarations hit Asia and the Middle East.
• China ran at 83-84% while Japan, Korea and Taiwan held 60-70%.
• Flakes traded near $500-510 per ton FOB Northeast Asia.
• Rising freight and bunker surcharges lifted CFR landed costs faster.

Caustic soda prices firmed across North America in late May 2026 after disruptions centered on the Strait of Hormuz cut flows of crude oil, naphtha and liquefied natural gas, sending shocks through the global chlor-alkali and vinyls chains. US prices had already risen about 3.7% in the wake of the mid-March escalation, and roughly three dozen force majeure declarations followed across Asia and the Middle East as producers trimmed operating rates or suspended deliveries on feedstock shortages.

The supply response varied sharply by region. China's average chlor-alkali operating rate slipped only modestly and stayed high at about 83-84%, while plants in Japan, South Korea and Taiwan ran at roughly 60-70%. Several vinyl producers in northeast Asia declared force majeure, along with a smaller number in southeast Asia, which pulled spot availability lower and lifted replacement costs for buyers who rely on imported tonnage. Freight added to the strain, with both FOB and CFR values climbing and CFR rising faster as higher fuel prices and bunker surcharges pushed up the cost of moving cargoes.

The wider market remains split. In Asia-Pacific, Chinese oversupply has capped prices through the first half of 2026, with capacity additions of about 5% a year in 2024 and 2025 outpacing domestic demand growth. China accounts for an estimated 35-40% of global production capacity. Europe tells a different story, where permanent closures at several sites during 2025 removed meaningful volume, and a planned exit from an integrated chlor-alkali and PVC site by 2027 signals further structural tightening. North American caustic remained weaker on underlying demand before the Hormuz shock lifted prices.

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Recent quotes placed caustic soda flakes near $500-510 per ton FOB Northeast Asia, with southeast Asian import levels around $380-400 per ton on a dry basis. For procurement teams in alumina refining, pulp and paper, textiles, soaps and water treatment, the message is that landed costs are rising even where regional fundamentals look soft, because freight and force majeure are doing the work that demand alone would not. The split between a well-supplied China and a tightening Europe also means sourcing strategy matters more than a single global benchmark.

Buyers exposed to imported caustic should review contract terms for force majeure pass-through and consider spreading volume across origins to limit disruption risk. Where chlorine co-product economics drive producer behavior, weak chlorine and PVC demand can push operators to cut output, which tightens caustic further. Watching operating rates in northeast Asia, European closure timelines and freight indices will give the clearest early read on where landed costs head next.