China's Caustic Soda Capacity Reaches 51.51 Mt in 2025

In 2025, China's caustic soda industry recorded a net expansion in production capacity, with 1.61 million tonnes of new capacity added and 0.2 million tonnes withdrawn, bringing total national capacity to 51.51 million tonnes. Three new caustic soda producers entered the market during the year, while one exited, resulting in a total of 174 operating enterprises nationwide. These companies are distributed across provinces, autonomous regions, and municipalities directly under the central government, excluding Beijing Municipality, Hainan Province, and the Tibet Autonomous Region.

Over the past two decades, China's caustic soda production capacity has progressed through several clearly defined development stages.

Rapid Growth Phase (Pre-2007)

Before 2007, China's caustic soda industry experienced its most aggressive expansion. Supported by sustained macroeconomic growth, production capacity expanded continuously, with average annual growth rates exceeding 20%.

Stabilisation Phase (2008–2013)

The global financial crisis significantly constrained both global and domestic economic growth. As a basic chemical product closely tied to overall economic activity, caustic soda saw its capacity growth slow markedly. During this period, annual capacity growth stabilised at approximately 10%.

Declining Growth Phase (2014–2015)

As profitability weakened, capacity expansion and new project approvals became more disciplined. Market-driven consolidation accelerated, with less competitive and outdated facilities exiting in line with policy requirements. Net caustic soda capacity growth declined sharply, registering negative growth for the first time in 2015.

Relatively Stable Phase (2016–Present)

From the third quarter of 2016, China's caustic soda market operated at relatively elevated levels, supported by improved corporate margins. Previously delayed capacity expansion projects gradually came onstream. Although some production capacity continued to exit, overall capacity maintained modest growth. During 2021–2022, the COVID-19 pandemic slowed the implementation of caustic soda projects, resulting in limited new capacity additions. From 2023 to 2025, net capacity growth is expected to remain broadly within normal historical ranges.

In recent years, new capacity additions have been primarily concentrated in projects utilising waste salt as feedstock for caustic soda production. Meanwhile, capacity withdrawals have mainly involved the permanent shutdown of ageing production units and enterprises located outside designated chemical industrial parks.