First Research: The high-level movement of caustic soda has slowed down, and caustic soda futures prices are fluctuating at high levels

According to First Capital Research, the pace of high-concentration caustic soda shipments has slowed somewhat, and caustic soda futures prices are trading in a high-range consolidation.

In the spot market, Shandong 32% ion-membrane caustic soda is priced at 728 yuan/ton, up 2 yuan/ton from the prior trading day. In Shandong’s main producing areas, prices for low-concentration caustic soda have held steady as the market waits and watches. In the southwestern Shandong market, prices for low-concentration caustic soda continue to move higher. On the demand side for low-concentration caustic soda, there is no obvious additional increase; most transactions are driven by rigid needs. Supported by export orders, high-concentration caustic soda is relatively strong in the short term.

On the supply side, Qilu Petrochemical’s 200,000-ton unit will enter maintenance starting March 21 for 10 days. Jiangsu Haixing’s 300,000-ton chlor-alkali unit is scheduled to shut down for maintenance from late April to early May for about one month. A large chlor-alkali enterprise in Jiangsu has planned maintenance for its 600,000-ton chlor-alkali unit starting April 15 for 15 days. Due to better export demand, domestic caustic soda producers’ capacity utilization averaged 84.6% this week, up 0.7 percentage points month-over-month. Caustic soda producers in Shandong are optimistic about the outlook; some factories have proactively increased inventories. This week, liquid caustic soda plant inventories were 525,400 tons (wet tons), up 4.93% month-over-month and up 14.28% year-over-year.

On the demand side, in the near term, domestic alumina plant operating rates have been recovering only slowly; new alumina projects are pending commissioning, and non-aluminum demand remains characterized by rigid needs. Domestic liquid caustic soda exports are proceeding relatively smoothly, and long-term contract orders have not yet been fully shipped out.

Viewpoint: Geopolitical conditions have not yet been further escalated, but the domestic and overseas chlor-alkali units’ reduced or suspended production triggered by geopolitics are still ongoing. Export demand provides some support to market conditions. It is expected that in the short term, caustic soda futures prices will continue to trade in a high-range consolidation. Pay attention to geopolitical developments, changes in domestic and overseas units, and the timing of downstream new capacity ramp-up.

(The above is for reference only and does not constitute investment advice)