Why is caustic soda pricing so dependent on alumina buyers despite new capacity?

Why is caustic soda pricing so dependent on alumina buyers despite new capacity?
China's caustic soda market is structurally a buyer-dominated one, with alumina consuming roughly 31-34% of output. Alumina capacity is concentrated among a few large players, giving them outsized bargaining power to squeeze purchase prices, as seen in January 2026 when some regional alumina buyers pushed offers down to 645 yuan/ton. Meanwhile, new caustic soda capacity has been coming online, but alumina expansions remain partly on paper due to bauxite supply constraints in Guinea and stricter domestic mining rules. The result is a supply-demand mismatch: nominal demand grows, but real offtake lags. Price recovery is unlikely to start with producer price hikes; watch for alumina restocking, easing ore supply, or a shift in buyer expectations as leading indicators.