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Caustic Soda Overview
Has your business noticed an increase in the price of caustic soda? Producers of this common industrial chemical have been accused of engaging in a price-fixing scheme that has sharply raised costs over the last few years. This kind of price-fixing scheme violates a number of federal antitrust laws.
If your business purchased caustic soda (lye) sometime since October 2015, you may have been affected by this alleged price-fixing scheme, and thus may be able to join this class action lawsuit investigation.
What is Caustic Soda?
Caustic soda and lye are both names used for the chemical compound sodium hydroxide (NaOH). Lye can also refer to potassium hydroxide or sodium hydroxide, while caustic soda refers specifically to sodium hydroxide.
Lye’s caustic (or corrosive) nature, meaning it is capable of damaging or destroying another substance by contact alone, is the basis for its common name.
Sodium hydroxide is used for a number of industrial purposes, including making soap, candles, and certain foods, homemade biodiesel, water treatment, recycling, aluminum production, frosting glass, pharmaceuticals, and refining cooking oils, among others.
What is Price-Fixing?
Federal antitrust laws, including the Sherman Anti-Trust Act of 1890, are broad, and restrict companies from conspiring to restrain trade. These laws exist in order to prevent monopolies and anti-competitive conduct.
When companies agree to fix prices instead of competing in the market place, consumers ultimately pay substantially more and more for products.
What is the Lye Price-Fixing Scheme?
Several producers of caustic soda have been accused of price-fixing the lye market since at least October 2015, ultimately raising the price of the substance by more than 50 percent. A recent caustic soda lawsuit alleged that this dramatic price increase was not because of the natural fluctuation of the market, but because of a deliberate scheme by lye producers to shut down production and artificially create a shortage to drive prices up.
This scheme reportedly began in 2015 after a three-year drop in caustic soda prices. The scheme was meant to fly under the radar of purchasers and regulators, the lawsuit alleges, by using secret agreements and nonpublic information to manipulate the market.
Who are Major Caustic Soda Companies?
Major manufacturers of lye include:
- Olin Corporation
- A. Steel Chemicals, Inc.
- Occidental Petroleum Corporation
- Occidental Chemical Corporation
- Westlake Chemical Corporation
- Shin-Etsu Chemical Co., Ltd.
- Shintech Incorporated, Formosa Plastics Corporation
- Formosa Plastics Corporation, U.S.A.
Some of these lye producers, among others, have been accused by direct purchasers of engaging in a price-fixings scheme over the last several years to manipulate the sodium hydroxide market and increase profits at the expense of businesses and consumers alike.
If your business has been affected by a sharp price increase for your caustic soda supply since October of 2015, your company may be able to join this class action lawsuit investigation and potentially qualify to pursue compensation.
