Concentration of caustic (NaOH) can occur as a result of steam blanketing (which allow salts to concentrate on boiler metal surface) or by localized boiling beneath porous deposits on tube surface. Caustic corrosion occurs when caustic is concentrated and dissolves the protective magnetite (Fe₃O₄) layer, causing a loss of base metal and eventual failure.

The following conditions appear to be necessary for this type of cracking to occur :  

1.      The metal must be stressed,

2.      The boiler-water must contain caustic,

3.      At least a trace of silica must be present in the boiler-water, and

4.      Some mechanisms, such as a slight leak, must be present to allow the boiler water to concentrate on the stressed metal.

Steam blanketing is a condition that occurs when a steam layer forms between the boiler water and the tube wall. Under this condition, insufficient water reaches the tube surface for efficient heat transfer. The water that reaches the overheated boiler wall is rapidly vaporized, leaving behind a concentrated caustic solution, which is corrosive.

Boiler feed water systems using demineralized or evaporated make up or pure condensate may be protected from caustic attack through coordinated phosphate/pH control. Phosphate buffers the boiler water, reducing the chance of large pH changes due to the development of high caustic concentrations. Excess caustic combines with disodium phosphate and forms trisodium phosphate, by the following reaction:

Na₂HPO₄ + NaOH > Na₃PO₄ + H₂O

This results in the prevention of caustic buildup beneath deposits or within a crevice where leakage is occurring.

Caustic corrosion is also referred to as caustic gouging or ductile gouging.