SunSirs: Current Status of Liquid Caustic Soda Exports and Shipping

According to Sina Finance, liquid caustic soda—an aqueous solution of sodium hydroxide—exported from China primarily consists of the 50% concentration grade produced via the ion-exchange membrane process (with some 32% grade also exported); it is classified as a Class 8 corrosive hazardous chemical (UN 1824). China is the world's largest producer of caustic soda, accounting for approximately 51% of global production capacity (with an effective capacity exceeding 50 million tons/year and a marketable liquid caustic soda volume of around 17 million tons/year as of 2025). Constrained by the domestic balance between PVC and chlor-alkali production, liquid caustic soda consistently faces oversupply; consequently, exports serve as the primary outlet for absorbing surplus capacity from North and East China, making the country the leading net exporter of liquid caustic soda in the Asia-Pacific region.

China's liquid caustic soda exports in 2026 maintained the strong momentum seen at the start of 2025, though performance varied significantly across quarters.

January–March: Export volume totaled approximately 847,400 tonnes, a slight year-on-year increase of 0.63%; exports in March alone reached 369,000 tonnes.

January–April: Cumulative exports reached 1.2931 million tonnes, up 10.1% year-on-year. April exports alone hit 443,500 tons—a surge of 33.6% year-on-year and 20.2% month-on-month—marking the peak for the first half of the year.

Average Export Price: The average customs export price was approximately $248/ton in March (down 22% month-on-month) and rebounded to $302/ton in April (up 21.5% month-on-month). Entering June, mainstream FOB China quotes fell back to $230–$240/ton due to increased Asian supply and a "wait-and-see" attitude among buyers, resulting in sluggish actual trading.

While the first quarter was stable, April saw a surge driven by overseas supply gaps (stemming from Middle East geopolitical conflicts and the shutdown of European chlor-alkali plants); however, export momentum waned by the end of the second quarter as overseas plants resumed production and demand from the alumina sector weakened. Signals of marginal weakening in 2026:

Some Indonesian nickel companies adjusted their hydrometallurgical processes (experimenting with magnesium oxide as a substitute for caustic soda), partially offsetting demand growth;

Local chlor-alkali capacity in Southeast Asia gradually came online (e.g., expansions in Vietnam and Thailand), leading to a downward trend in import dependency over the medium to long term;

The price spread between domestic and international liquid caustic soda narrowed, squeezing export arbitrage margins and diverting some supplies back to the domestic market;

Liquid caustic soda export volumes in 2026 were unlikely to maintain the rapid growth seen previously, potentially stabilizing at high levels or declining slightly, though essential demand from the Australian alumina industry continued to provide a floor for the market.

II. Trade Flows and Destination Patterns

From January to March 2026, liquid caustic soda exports were highly concentrated in Asia-Pacific nations with demand for alumina and papermaking; the alumina industries in Australia and Indonesia served as the core pillars for Chinese exports, driven by rigid demand for 32% ion-exchange membrane liquid caustic soda in their bauxite refining processes.

III. Domestic Export Ports and Logistics Models

Liquid caustic soda is classified as an IMDG Class 2 hazardous chemical, requiring transport via stainless steel or specially coated tank compartments or dedicated chemical tankers. Key export ports included:

Bohai Rim (Tianjin Port, Qingdao Port, Yantai Port/Longkou Port Area): Chlor-alkali capacity is concentrated in Shandong; Yantai Port features a dedicated 40,000-cubic-meter liquid caustic soda tank farm and five specialized berths for liquid chemicals. The "factory-port-tank farm-shipping" integrated model is mature, and Yantai Port's liquid caustic soda export volume rose by over 24% year-on-year in 2026.

Yangtze River Delta (Shanghai Port, Ningbo-Zhoushan Port): These serve as the primary export gateways for East China's chlor-alkali enterprises, offering convenient connections for inland "road-to-water" transport.

Southeast Coast (Fuzhou Port's Jiangyin Port Area, etc.): Products from companies like Fujian Southeast Electrochemical are shipped from here; in March 2026, the Jiangyin Port Area completed a single export shipment of 53,000 tons of liquid caustic soda via a "direct loading upon arrival" method, setting a provincial record.

Typical Logistics Chain: Chlor-alkali plant → Tank truck → Port bonded/export tank storage → Loading onto chemical tanker deep-sea tanks or ISO tank containers → Direct pipeline discharge at the destination port. Customs measures such as "direct loading upon arrival" and "immediate processing upon docking" have significantly reduced customs clearance times.

IV. Maritime Shipping Market and Chartering Status

The maritime transport of liquid caustic soda relies on CABU vessels and stainless-steel chemical tankers. Common vessel types range from 8,000 to 20,000 DWT, alongside some converted LR1/LR2 vessels. The maritime landscape in 2026 exhibits the following characteristics:

Capacity and Space: Intra-Asia capacity for Type II chemical tankers is generally balanced, though periodic tightness occurred during peak seasons (Q1 through early Q2), requiring booking 2–3 weeks in advance on certain routes. Large-tonnage chemical tankers (20,000–50,000 DWT class) are active on the Australia–Indonesia route.

Freight Rate Trends: Global Very Low Sulfur Fuel Oil (VLSFO) prices fluctuated at high levels in 2026, prompting liner companies to raise Bunker Adjustment Factors (BAF). Time Charter Equivalent (TCE) rates for intra-Asia chemical shipping rose moderately compared to late 2025, driving up the converted cost of FOB-based shipments.

(I) CABU Vessels—Dual-purpose Liquid Caustic Soda/Bulk Carriers (Mainstream for Large-Volume Transport)

CABU (Caustic soda And Bulk Unit) vessels are specifically designed for dual-purpose operations: carrying liquid caustic soda on the outbound leg and dry bulk cargo (such as bauxite or grain) on the return leg. Typical deadweight tonnage ranges from 20,000 to 65,000 tonnes (with the world's largest class reaching approximately 65,000 DWT and a length of 228 meters). They operate on a "pendulum" route (China → Australia with liquid caustic soda → return with bauxite → China), significantly reducing ballast voyage rates and offering both economic and environmental advantages.

Between 2025 and 2026, the Jiangyin Port Area in Fuzhou and the Qingdao/Yantai port areas in Shandong frequently handled CABU vessels (each voyage directly shipping 42,000–53,000 tonnes of liquid caustic soda to Australia), marking the entry of China's liquid caustic soda exports into an era of "direct bulk shipment via large vessels." Currently, only about seven domestic ports are equipped to handle the berthing of CABU vessels and the direct loading of liquid caustic soda (including Qingdao, Yantai Longkou, Tianjin, Lianyungang, Nantong, Zhangjiagang, and Fuzhou Jiangyin).

(II) Stainless Steel Chemical Tankers (Small-to-Medium Batch / Multi-Port Calls)

Type II stainless steel chemical tankers (8,000–22,000 DWT) are suitable for shipments involving multiple port calls (e.g., Indonesia, Taiwan, Vietnam) or smaller order volumes; while highly flexible, their unit freight costs are higher than those of CABU vessels.

Typical Routes

China Coastal (Qingdao/Yantai/Tianjin/Jiangyin/Zhangjiagang) → Gladstone/Cairns/Newcastle, Australia (Primary CABU route; voyage duration: approx. 12–18 days)

China → Jakarta/Surabaya/Batam, Indonesia → Ho Chi Minh City, Vietnam (Chemical tanker; voyage duration: approx. 5–7 days)

China → Kaohsiung/Taichung, Taiwan (Short-haul chemical tanker; voyage duration: approx. 2–3 days)

Maritime transport of liquid caustic soda does not pass through the Strait of Hormuz or the Red Sea, offering relatively favorable geopolitical security. Key risk factors include operational window constraints at North/East China ports during typhoon season, compatibility issues with liquid caustic soda unloading arms at Australian ports, and fluctuations in return cargo (bauxite) for CABU vessels. V. Current Core Issues and Outlook Assessment

China’s excess liquid caustic soda capacity requires export absorption; Australia (for alumina) and Indonesia (for nickel smelting) have inelastic import demands, creating strong bilateral trade ties.

Policy Risk

Liquid caustic soda has not been included in US/Western sanctions lists against China; trade policy risks are far lower than those for ethane or chips, with the market primarily driven by global demand cycles.

Maritime Shipping Support

The expansion of the CABU (Combined Alumina/Bauxite) fleet and the construction of dedicated coastal liquid chemical terminals have enhanced bulk direct-loading capabilities; however, the number of ports equipped for unloading remains limited, leading to tight berth availability during peak seasons.

Downside Risks

Process substitution in Indonesia, local chlor-alkali capacity expansion in Southeast Asia, and narrowing price spreads between domestic and international markets could dampen export growth.

Outlook

Export volumes are projected to fluctuate at a high level of 3.0–3.5 million tons between 2026 and 2027; the proportion of CABU vessel usage on the Australia route will continue to rise, while the Southeast Asia route will remain dominated by chemical tankers.

Overall, China’s liquid caustic soda exports have established a stable overseas market with Australia and Indonesia as dual core destinations. On the shipping front, the large-scale deployment of CABU dual-purpose vessels and the upgrading of coastal liquid chemical terminals have rapidly increased the proportion of bulk direct loading and continuously optimized logistics costs. The greatest uncertainty stems from changes in downstream processing technologies and domestic-versus-international price ratios, rather than the risk of political embargoes.

Summary:

Adhere to a strategy of "locking in capacity via long-term contracts (COA) while replenishing stocks via the spot market." For the Australia route, firmly secure CABU vessel COAs to solidify the "outbound liquid caustic soda/inbound bauxite" pendulum shipping model, thereby hedging against rising BAF (Bunker Adjustment Factor) costs and locking in low freight rates. Given that only seven domestic ports support CABU direct loading, prioritize cargo consolidation at established port areas such as Yantai, Qingdao, and Jiangyin to avoid increased transshipment costs caused by port qualification issues. In response to demand fluctuations in Southeast Asia, maintain flexibility in spot chartering for chemical tankers; remain vigilant regarding the risk of volume declines due to process substitution in Indonesia to avoid the "vessel waiting for cargo" scenario after locking in charters at high rates.

CABU Shipowners

Deepen the "pendulum effect" and strengthen control over backhaul cargo. For CABU vessels, the primary profit driver lies in reducing ballast voyage rates; it is recommended to secure long-term contracts with Australian mining companies and traders for backhaul ore shipments, thereby establishing a closed-loop, two-way trade pattern. Capitalize on the expansion of domestic port tank farm capacity scheduled for 2026 and the policy benefits of "direct loading upon arrival" to increase port call frequency at northern Chinese ports and boost vessel turnover rates. Pay close attention to vessel compliance, ensuring adherence to the strict unloading arm connection standards at Australian ports to avoid demurrage.

Stainless Steel Chemical Tanker Owners

Adopt a "differentiated and regionalized" operational strategy. Avoid direct price competition with CABU vessels regarding Australian bulk cargoes; instead, focus on cultivating feeder markets and multi-port call operations in regions such as Indonesia, Taiwan, and Vietnam—areas where CABU vessels face operational limitations or coverage gaps. Utilize the window of looser supply and charterer hesitancy at the end of the second quarter to conduct vessel maintenance. Closely monitor the pace of capacity expansion in the Southeast Asian chlor-alkali industry; should local import dependency decline, promptly adjust capacity deployment and seek new growth markets (such as South Asia or the Middle East) to maintain leverage in freight rate negotiations.

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