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  • Writer's pictureShekhar Yadav

Chloralkali process – Unique relationship between Caustic Soda & Chlorine industry

Updated: Jul 30, 2021

Hi there,

I was analyzing Gujarat Alkali & Chemicals when I became aware of the interesting relationship between Caustic Soda & Chlorine. Just to clarify, I will not be talking from the company’s business but about these two chemicals & their relation.

In my limited chemical world, I came across a unique relationship between Caustic soda & Chlorine. Also known as the Chloralkali industry, In the process of manufacturing Caustic soda, for 1 unit of Caustic Soda produced, 0.89 unit of Chlorine is formed. 

Caustic soda is used primarily in the manufacture of pulp and paper, alumina, soap and detergents, petroleum products and chemical production.

You might be thinking in terms of what can be better than this. (Ek ke Sath ek free) But then, you need to learn about the reality of Chlorine gas.

Chloralkali process- Unique relationship between Caustic Soda & Chlorine industry

Characteristics of Chlorine gas:

  1. Hazardous

  2. React violently with hydrocarbon

  3. Given its toxicity, it was even used as a chemical weapon during World War 

  4. Highly corrosive

  5. Highly toxic

  6. Needs to be disposed off within certain time.

One way is to sell it off to manufacturers who use Chlorine as the raw material. But that too also depends on the demand of chlorine in the market. If the demand is not there, they have to sell it off at a negative price i.e. pay others to take chlorine from you. A while back Caustic soda manufacturers had to sell chlorine at Negative 7000/Litre. What can be worse than that?

The company needs to reduce production of Caustic soda in case the demand for Chlorine drops. The fate of these two chemicals goes hand in hand.

Also, given the toxic nature of Chlorine, Indian govt doesn’t allow seaborne trade where it could be exported abroad, implying it needs to be consumed domestically.

In order to work out a solution, many caustic soda manufacturers have started manufacturing products that use Chlorine which would be Poly Vinyl Chloride(PVC), Sodium Chlorate etc.

Now, let’s look at how the two chemicals are produced.

Formed by the electrolysis of the below solution. (Electrolysis is the process of breaking down chemicals by passing electricity) NaCl (Salt)+ H20 (Water)=> NaOH (Caustic Soda)+ H2 + Cl2 (Chlorine gas) Highly power intensive. Power Cost costs eats up 25% of revenue. If the company is able to bring down the power cost, it immensely benefits the company.

Industry basically uses 2 technologies to produce Caustic soda/Cl:

1. Membrane cell technology- Costly to set up but consumes lesser amount of power which is 2300-2450 Kwh/MT Almost all of the facilities in India uses membrane cell technology whereas everywhere else Mercury based technology is used. So in a way, I can say India leads the world in terms of production of CS(At least something to be proud of)

2. Mercury cell technology- Cheaper to set up and that leads to higher power cost which is at 3150-3300 Kwh/MT. In addition usage of mercury causes health damage.

Chloralkali process- Unique relationship between Caustic Soda & Chlorine industry

Chemical process of a membrane cell. Image source:

Chloralkali process- Unique relationship between Caustic Soda & Chlorine industry

Chemical process of a mercury cell. Image source:

Another interesting fact about the industry is that compared to India Chlorine is the core product in developed countries whereas Caustic soda is the by-product(Just the opposite)

Most of the European facilities were running on mercury cell technology. Since this method consumes a higher amount of power & because of its hazards to life, the European Union has mandated all chloralkali producers to shift to membrane cell technology by December 2017.

More than 800,000 dry metric tonnes/year (DMT/year) of net caustic soda capacity closed in 2017, with almost 1.2m dmt/year closing since 2014, due to the phasing out of mercury cell technology in Europe.

This is another factor putting up upward pressure on the prices of caustic soda.

Added to this, China is also shutting down its Caustic soda production which has lead to an increase in prices of Caustic soda by 30%.

This may sound good but there has been aggressive capacity expansion by Indian companies which most likely is to affect the prices of caustic soda with a negative bias.

Top caustic soda player in India- Grasim Ind DCM Shriram Gujarat Alkali RIL

Further reading:


Shekhar Yadav

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