What is Caustic Soda?

Caustic soda, also known as lye or sodium hydroxide, is a common chemical used in the creation of soap, cleaning supplies, and other products.

What is caustic soda?

Caustic soda, also known as lye or by its chemical name sodium hydroxide, is a substance with strong corrosive properties. The chemical can cause skin and eye irritation in both its liquid and solution forms, meaning that safety measures are required when handling the material.

What are the common uses of caustic soda?

Probably the most well-known use of lye is in the production of soaps. But that’s not it’s only use; sodium hydroxide has a wide range of industrial applications:

• Disinfectant Products: Sodium hydroxide is used in numerous household cleaning products such as chlorine bleach and drain cleaners.
• Pharmaceuticals & Medicine: Although the chemical is corrosive, it can be found in common pain relievers, anticoagulants, cholesterol medications, and more. Sodium hydroxide is involved in the manufacturing process of these drugs.
• Energy: Sodium hydroxide is reportedly being used in fuel cell production.
• Water Treatment: To control the acidity of water and to remove heavy metals, sodium hydroxide may be added to water in water treatment plants. The chemical is also used in the production of other water disinfectants such as sodium hypochlorite.
• Food Production: Caustic soda can be used in various food applications to help with processing and preserving.
• Wood & Paper Products: Wood may be treated with sodium hydroxide to remove unwanted material before paper production. Lye may also be used to refine the raw materials used in woodworking.
• Aluminum Ore Processing: Sodium hydroxide can be used to extract aluminum from other minerals. Aluminum can then be used for manufacturing, building, construction, and more.
• Other Industrial Manufacturing: Sodium hydroxide can be used in a variety of other industrial processes, including the manufacturing of rayon, spandex, explosives, epoxy resins, paints, glass, ceramics, and dyes. It is also used in laundering, bleaching, metal cleaning and processing, oxide coating, electroplating and electrolytic extracting.

What is the caustic soda price fixing scandal?

In late March, a chemical distributor from New York filed an antitrust class action lawsuit against several producers of caustic soda. Amrex Chemical claimed that numerous manufacturers conspired together to artificially increase the price of caustic soda by more than 50 percent. The price fixing scheme allegedly began in 2015 when secret agreements, information exchange, and manipulation of the price index caused prices to rise.

The small distributor named several sodium hydroxide companies, including Formosa Plastics, Occidental Chemical, Olin, Shintech, and Westlake Chemical. Together, these companies reportedly product at least 90 percent of the lye used in the United States.

The companies allegedly made large amounts of money from the scheme. Combining the large demand for lye in industrial processes and the collective control the companies had over the market, the companies were easily able to skyrocket profits through price fixing. Unfortunately, these gains were allegedly made at the expense of smaller entities such as Amrex Chemical who had no choice but to purchase sodium hydroxide at increased prices.

Join a Free Caustic Soda Class Action Lawsuit Investigation

If your business has purchased caustic soda since 2015, you may have been affected by this alleged price-fixing scheme. Participating in this free caustic soda price-fixing class action lawsuit investigation may help you get compensation.

Learn More

This article is not legal advice. It is presented
for informational purposes only.