ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Commodities

Japan's Asahi Glass hiking caustic soda prices as export rates soar

Prices in greater Asia have nearly doubled over past year

Demand for caustic soda, used to make everything from diapers to aluminum, is surging in Japan.

TOKYO -- Asahi Glass will raise prices on caustic soda -- used in papermaking and a variety of other industries -- by 30-40% to more closely match the going Asian rates as domestic demand for the versatile chemical climbs.

The Japanese company began negotiating Monday with volume customers including papermakers and steelmakers to increase prices by 18 yen (16 cents) per kilogram in December from around 60 yen now. Prices on caustic soda exports to Asia were up around 10% on the month as of mid-November and nearly doubled on the year, rising around 50% above the Japanese price.

"Profits on shipments to Asia are climbing -- it would make no sense to let the price gap persist," a representative for Asahi Glass said. The company is Japan's No. 2 producer of the chemical also known as lye, with around 600,000 tons of capacity, holding a 20% share of the domestic market.

Demand at home provides further reason to raise prices. A graying population as well as Asian buyers make for a brisk market for disposable diapers, which include superabsorbent polymers made using caustic soda. The chemical is also used to refine aluminum, used by automakers to build lighter, more fuel-efficient vehicles.

Overall caustic soda demand in Japan increased 4% on the year to 2.53 million tons for the nine months ended September, according to the Japan Soda Industry Association. Production rose just 3%. Many producers "are running close to full capacity and will likely find it difficult to raise operating rates further," a representative for Asahi Glass said.

Asahi Glass, Shin-Etsu Chemical and Kaneka had already raised prices roughly 10-20% per kilogram in May. But export prices have again jumped nearly 40% since then.

Whether smaller chemical makers will follow the example of Asahi Glass and other heavyweights is an open question, as persuading customers to accept price hikes will likely prove challenging.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more