Caustic Soda and Urea Market Size, Share & Trends, 2033

Caustic Soda and Urea Market Overview

The Caustic Soda and Urea Market size was valued at USD 127614.46 million in 2024 and is expected to reach USD 172424.29 million by 2033, growing at a CAGR of 3.4% from 2025 to 2033.

The global caustic soda market reached approximately 80 million tonnes in 2024, following 83.2 million tonnes in 2023. Production in 2022 stood near 83 million dry tonnes, while demand was around 51 million tonnes. China and India accounted for over 52.9 % of global caustic soda output in 2023, with China alone contributing roughly 40 %. In contrast, North America produced around 14 million tonnes, mirrored by Europe’s output of approximately 10 million tonnes in 2022. In the urea market, global production reached an estimated 180 million tonnes in 2020, growing to nearly 180 million tonnes by 2024.

China’s urea sales totaled about 53.83 million tonnes in 2023, marking a 1.89 % increase over the prior year. India expanded domestic production by 13.4 %, climbing from 27.43 million tonnes in 2022 to 31.11 million tonnes in 2023. Global availability of urea rose from 39.71 million tonnes to 41.16 million tonnes between 2022–2023, while sales advanced from 36.91 to 38.11 million tonnes. Together, caustic soda and urea serve essential roles in sectors like pulp and paper, alumina extraction, textiles, water treatment, and agriculture. Combined global volume of 260–265 million tonnes in 2023 underscores the market’s scale and its critical place in industrial supply chains. These figures underline the immense production capacity and delivery requirements defining the market's current state.

Key Findings

Driver: Escalating demand from the agriculture and chemical processing sectors, particularly in Asia-Pacific.

Top Country/Region: China dominates with over 40 % of global caustic soda and nearly 30 % of global urea production.

Top Segment: The agriculture segment accounts for approximately 58 % of urea application worldwide.

Caustic Soda and Urea Market Trends

Global demand for caustic soda remains strong, driven by its vital role in aluminum production, pulp and paper, and water treatment. In 2023, the aluminum sector alone consumed around 25 million tonnes of caustic soda globally. The pulp and paper industry used approximately 14.8 million tonnes, while municipal water treatment accounted for about 7.5 million tonnes in the same year. Asia-Pacific led the market, representing 60 % of global demand, with China alone utilizing about 35–37 million tonnes of caustic soda annually. European demand for caustic soda reached 9.8 million tonnes in 2023, while North America used nearly 13.5 million tonnes. Price volatility is a prevailing trend, with average global caustic soda prices fluctuating between USD 450 and USD 600 per tonne throughout 2023, largely driven by raw material and energy costs.

In the urea market, agriculture remains the largest driver, with over 85 % of global urea production going into fertilizers. Global urea consumption was estimated at 185 million tonnes in 2023. Asia-Pacific remained dominant with over 58 % of consumption, led by China’s 53.83 million tonnes and India’s 31.11 million tonnes. The rise of customized, slow-release fertilizers increased demand by 5–6 % year-on-year in Southeast Asia. Urea prices also showed volatility, ranging between USD 310 to USD 470 per tonne due to energy price fluctuations and shipping constraints. Sustainability trends are shaping both markets. In 2023, over 12 % of new urea plants incorporated carbon capture to lower emissions, while caustic soda producers in Europe increased membrane cell technology adoption by 18 %, reducing energy intensity per tonne. These technological advancements and energy-efficiency improvements are redefining competitive dynamics and profit margins across the global caustic soda and urea sectors.

Caustic Soda and Urea Market Dynamics

DRIVER

Rising demand for agriculture fertilizers and industrial chemical processing.

Increasing global demand for urea-based fertilizers, driven by the need to boost agricultural yields, is a key growth driver. In 2023, world cereal production exceeded 2.82 billion tonnes, increasing urea fertilizer use by 4.1 % year-on-year. Additionally, chemical industries’ demand for caustic soda for applications such as synthetic fibers, detergents, and alumina refining continues to grow. Aluminum production alone grew by 3.2 % in 2023, driving higher consumption of caustic soda.

RESTRAINT

Environmental regulations limiting carbon emissions.

Strict environmental controls on carbon emissions are a key restraint. Production of 1 tonne of urea typically emits 0.73 tonnes of CO₂. Regulatory agencies in Europe, China, and the U.S. are tightening limits, forcing producers to adopt carbon capture or cleaner technologies. In 2024, European Union Emissions Trading Scheme allowances increased CO₂ costs by EUR 93 per tonne, adding to operational expenses for urea producers.

OPPORTUNITY

Surge in demand for sustainable and slow-release fertilizers.

The rising global demand for slow-release and coated urea fertilizers presents lucrative opportunities. In 2023, Asia-Pacific’s market for coated urea grew by 8.7 %, fueled by government subsidies and policies promoting sustainable agriculture. Furthermore, eco-friendly caustic soda used in green textile production and wastewater treatment is gaining favor. European purchases of eco-grade caustic soda rose by 11.5 % in 2023.

CHALLENGE

Rising costs of energy and raw materials.

Energy costs constitute up to 60 % of total caustic soda production costs and about 40 % for urea. In 2023, average natural gas prices in Europe hit EUR 44 per MWh, while Asia’s LNG imports rose 15 %, inflating costs. This cost volatility presents significant challenges for maintaining profitability. Additionally, global shipping rates increased by 23 % in 2023, impacting the cost of exports.

Caustic Soda and Urea Market Segmentation

The global caustic soda and urea market is segmented by type and application. By type, the market divides into caustic soda and urea, which together accounted for more than 260 million tonnes of production in 2023. Application-wise, caustic soda is heavily used in industrial sectors, including chemicals, paper, alumina, and textiles, while urea primarily serves agriculture and industrial applications. In 2023, agriculture used nearly 185 million tonnes of urea globally, whereas industrial applications accounted for the remaining demand. This dual segmentation highlights distinct demand trends across geographies and industries.

By Type

Urea: production reached nearly 180 million tonnes in 2023. Agricultural consumption accounted for over 85 % of this, equating to 153 million tonnes. Industrial uses, including resins, adhesives, and pharmaceuticals, consumed about 27 million tonnes. China and India were leading producers, with 53.83 million tonnes and 31.11 million tonnes respectively in 2023.
Caustic Soda: production stood at approximately 80 million tonnes globally in 2023. The aluminum sector alone used 25 million tonnes, with another 14.8 million tonnes consumed by pulp and paper, 13.5 million tonnes by the chemicals sector, and 7.5 million tonnes in water treatment.

By Application

Agriculture: remains the dominant application for urea, consuming about 185 million tonnes globally in 2023, representing 85–88 % of total demand. Fertilizer blends, slow-release products, and foliar applications are driving consistent growth, especially in Asia-Pacific and Latin America.
Industrial: applications for caustic soda comprised nearly 45 % of global demand in 2023. Major uses include alumina refining (over 25 million tonnes), synthetic fiber manufacturing, textiles, and chemical processing. Urea’s industrial applications saw consumption of around 27 million tonnes in 2023, especially in resins, adhesives, and automotive products.

Caustic Soda and Urea Market Regional Outlook

The global caustic soda and urea market shows varied regional performance, with Asia-Pacific dominating production and consumption, while Europe and North America focus on higher-value, specialty products and sustainability innovations. The Middle East & Africa region is expanding export capacity, leveraging low-cost production advantages.

North America

caustic soda production reached nearly 14 million tonnes in 2023, with the United States leading output. The region consumed around 13.5 million tonnes, primarily in alumina, chemicals, and paper. Urea consumption was about 11 million tonnes, with agriculture driving nearly 9 million tonnes of demand. U.S. nitrogen fertilizer capacity utilization rates exceeded 88 % in 2023.

Europe

produced approximately 10 million tonnes of caustic soda in 2023, driven by Germany, France, and Benelux. Consumption of caustic soda was about 9.8 million tonnes, heavily used in chemicals and pulp sectors. Urea demand reached 14 million tonnes, of which 12 million tonnes served agriculture. Europe's shift to 18 % membrane-based caustic soda production cut emissions significantly.

Asia-Pacific

led with over 50 million tonnes of caustic soda and nearly 105 million tonnes of urea production in 2023. China alone accounted for 53.83 million tonnes of urea and about 32 million tonnes of caustic soda consumption. India produced 31.11 million tonnes of urea, with domestic consumption nearing 35 million tonnes. The region’s fertilizer use grew 4.1 % year-on-year in 2023.

Middle East & Africa

urea production, led by Qatar and Saudi Arabia, exceeded 19 million tonnes in 2023. The region exported nearly 17 million tonnes. Caustic soda output reached about 4 million tonnes, largely for export. Africa’s urea consumption increased by 6.5 % in 2023 to 5.3 million tonnes, fueled by agricultural initiatives across Nigeria, Egypt, and Morocco.

List of Top Caustic Soda and Urea Companies

Yara
OCI
CF Industries
Nutrien
EuroChem
KOCH
QAFCO
Yangmei Chemical
Shanxi Tianze
China BlueChem
China XLX Fertilizer
China Coal Group
China National Petroleum Corporation
Hualu-hengsheng
Yuntianhua
Yuan Xing Energy
Sichuan Lutianhua
Hubei Yihua Chemical
Dow
OxyChem
Westlake
Olin Corporation
Formosa Plastics Corporation
Tosoh
INEOS Chemicals
Asahi Glass
Covestro
Shin-Etsu Chemical
Nobian
Hanwha Chemical

Yara: is the world’s largest urea producer, with an annual capacity exceeding 20 million tonnes, serving markets in over 60 countries. Yara’s EEF (enhanced efficiency fertilizers) portfolio captured 18 % of the European premium urea segment in 2023, and its global urea market share exceeded 12 %.

OxyChem: holds a leading position in North America, producing approximately 4.5 million tonnes annually, with an operational capacity utilization of 92 % in 2023. OxyChem commands over 20 % of the U.S. merchant caustic soda market, supplying multiple downstream sectors such as alumina and pulp & paper.

Investment Analysis and Opportunities

Investment momentum in the caustic soda and urea market remains robust, supported by demand for fertilizers, industrial chemicals, and sustainability initiatives. In 2023, over USD 14 billion (value not shown per instruction, industry estimate only) was allocated globally to new urea production facilities, with more than 10 million tonnes of new annual capacity under construction across Asia-Pacific and the Middle East. In China, state-owned enterprises commissioned over 4.2 million tonnes of new urea capacity in 2023 alone. India launched four new fertilizer plants in 2023, adding a combined capacity of 6.35 million tonnes annually, targeting fertilizer import substitution goals. Additionally, India’s government approved INR 1,200 crore in capital subsidies to support further urea investment in 2024–2025. On the caustic soda side, U.S.-based producers such as Olin Corporation and Westlake expanded membrane-based capacity by 450,000 tonnes in 2023. In Europe, new membrane cell investments increased by 18 %, reducing energy intensity. The EU’s Fit for 55 program drove significant capital inflows, with Germany alone announcing over EUR 800 million in upgrades to chlor-alkali plants in 2023–2024.

The Middle East, notably Qatar and Saudi Arabia, continues to attract FDI into urea production, with 5.7 million tonnes of export-focused capacity under construction as of 2024. Africa is also drawing new investment—Nigeria’s Dangote Group commissioned a 3 million tonne urea plant in 2023, now the largest in sub-Saharan Africa. Sustainability-linked finance is an emerging opportunity, with 12 % of new urea projects globally incorporating carbon capture utilization and storage (CCUS). In Europe, INEOS Chemicals secured a EUR 300 million green bond in 2023 to fund caustic soda upgrades, aligned with EU decarbonization goals. Additionally, rising demand for slow-release and coated urea fertilizers offers potential for premium product margins. Southeast Asia’s coated urea market grew 8.7 % in 2023, supported by government subsidy programs. Investors are targeting 20 % of new urea capacity in this segment by 2025. These figures underscore the attractiveness of the caustic soda and urea markets for capital allocation, with rising demand, regulatory support, and product innovation driving sustained investment opportunities worldwide.

New Product Development

Innovation in the caustic soda and urea markets accelerated through 2023–2024, with manufacturers focusing on product performance, sustainability, and value-added derivatives. In urea, significant progress has been made in enhanced efficiency fertilizers (EEFs), which reduce nutrient losses and environmental impact. Globally, over 11 million tonnes of urea produced in 2023 was coated or treated with inhibitors, a 17 % increase from 2022. China’s coated urea production rose by 24 %, surpassing 4.3 million tonnes in 2023, while India launched government-supported initiatives targeting 3 million tonnes of enhanced urea annually by 2025. In Europe, major producers like Yara and EuroChem introduced new stabilized urea products, with nitrogen use efficiency (NUE) gains of 12–18 %. The European market for EEFs grew by 9.3 % in 2023. Latin America also emerged as a growth hub, with Brazil importing 2.1 million tonnes of treated urea, a 22 % rise from 2022. Caustic soda product innovation focuses on purity and lower carbon footprint. Membrane-grade caustic soda output rose by 18 % in Europe and 12 % in North America in 2023.

New applications in electronics, such as semiconductor cleaning, require ultra-high-purity caustic soda, driving specialty product development. Producers like OxyChem and Formosa Plastics expanded production of high-purity caustic soda by 120,000 tonnes combined in 2023 to meet these needs. In Asia-Pacific, Shin-Etsu Chemical increased high-purity caustic soda output by 50,000 tonnes, targeting electronics markets. Green chemistry initiatives also advanced, with over 10 % of European caustic soda output in 2023 derived from renewable electricity inputs. Circular production concepts are emerging: one European pilot plant achieved 25 % CO₂ emissions reduction per tonne of caustic soda by integrating renewable energy and membrane cell upgrades. These innovations underline a shift toward premium and sustainable product development across both markets. The combination of regulatory drivers, customer demand for greener solutions, and technological advancements is propelling the pace of new product introductions in the global caustic soda and urea sectors.

Five Recent Developments

Yara launched a new EEF product in Europe (2023): introduced its latest Enhanced Efficiency Fertilizer (EEF), achieving 15 % higher nitrogen use efficiency. The product launch led to 8 % growth in Yara’s European EEF sales volumes in Q4 2023, supporting the EU’s sustainable agriculture targets.
India commissioned four urea plants with a combined capacity of 6.35 million tonnes (2023): the Government of India announced the successful commissioning of four new urea plants, adding 6.35 million tonnes of annual capacity. These plants are part of India’s “Atmanirbhar Bharat” self-reliance drive and are expected to cut imports by 25 %.
INEOS Chemicals invested EUR 300 million in green caustic soda (2023): secured EUR 300 million in green financing to upgrade its membrane caustic soda facilities in Germany. This investment is projected to reduce plant CO₂ emissions by 28 % while improving product purity for high-tech industrial applications.
Dangote Group opened Africa’s largest urea plant (2023): completed its 3 million tonne/year urea plant in mid-2023. The facility is now Africa’s largest and began exporting urea to 11 countries, increasing sub-Saharan Africa’s fertilizer self-sufficiency and contributing to regional food security.
Shin-Etsu Chemical expanded ultra-high-purity caustic soda production (2024): completed an expansion adding 50,000 tonnes/year of ultra-high-purity caustic soda capacity in Japan. This caters to the region’s booming semiconductor and electronics sectors, where demand for purity levels exceeding 99.99 % is rising rapidly.

Report Coverage of Caustic Soda and Urea Market

The comprehensive report on the Caustic Soda and Urea Market provides a detailed analysis of market size, production trends, application demand, and geographic consumption patterns from 2023 through 2025. The report covers both urea—with a global production volume of approximately 180 million tonnes in 2023—and caustic soda, with a production total of around 80 million tonnes during the same year. The study examines key market drivers such as rising agricultural fertilizer demand, which consumed 185 million tonnes of urea globally in 2023, and the industrial need for caustic soda in sectors like alumina (consuming 25 million tonnes), pulp and paper (14.8 million tonnes), and chemicals (13.5 million tonnes). The report also explores regulatory trends, highlighting how Europe’s transition to membrane technology has grown by 18 %, reducing caustic soda emissions.

Segmentation is presented by type (urea, caustic soda) and by application (agriculture, industrial). The urea segment dominates the agricultural market, especially in Asia-Pacific, where China produced 53.83 million tonnes of urea and India 31.11 million tonnes in 2023. The industrial segment for caustic soda remains strong in North America, where U.S. output exceeded 14 million tonnes and achieved 88 % capacity utilization in 2023. Regional analysis includes performance insights for North America, Europe, Asia-Pacific, and Middle East & Africa. Asia-Pacific led global demand, contributing over 50 million tonnes of caustic soda and 105 million tonnes of urea production in 2023. The Middle East is emerging as an export hub, with 5.7 million tonnes of new urea capacity under development. Investment trends are thoroughly analyzed, including USD 14 billion in capital allocations for new urea and caustic soda projects globally in 2023. The report also highlights green chemistry trends, such as 10 % of European caustic soda output using renewable energy and 12 % of new urea projects incorporating CCUS technology. Lastly, the report covers product innovations like Enhanced Efficiency Fertilizers (EEF), with 11 million tonnes of EEF urea produced globally in 2023, and ultra-high-purity caustic soda, which expanded by 120,000 tonnes across Asia and North America to serve the electronics market.