Industry Overview
1. Definition
Sodium hydroxide is a Inorganic compound with the chemical formula NaOH. Sodium hydroxide is strongly alkaline and highly corrosive. It can be used as an ACID neutralizer, a compound masking agent, a precipitating agent, a precipitation masking agent, a color developing agent, a saponifying agent, a peeling agent, and a Detergent.
2. Industry Chain Analysis: Widely Used Downstream
The Caustic Soda industry is an industry that produces caustic soda using raw salt and electricity as raw materials. Subsequently, more caustic soda products are obtained by adding other substances to react with it. There are many types of caustic soda products with high correlation, and there are thousands of downstream products with high economic extension value. It is widely used in various lifeline departments of the national economy such as light industry, textile, and papermaking, and plays a crucial role in China's economic development.
At present, the upstream of China's caustic soda industry chain is mainly supplied with raw materials by enterprises such as Zhongtai Chemical, Binhua Co., Ltd., and Lubei Chemical. The middle reaches are mainly composed of Shanghai Soda Chemical Co., Ltd., Anhui Huasu Co., Ltd., Jiangxi Shilong Industrial Co., Ltd., Zhejiang Jiahua Energy and Chemical Co., Ltd., Yibin Tianyuan Group Co., Ltd., Shenyang Chemical Co., Ltd., Zhejiang Zhenyang Development Co., Ltd., Inner Mongolia Ordos Resources Co., Ltd Inner Mongolia Junzheng Energy and Chemical Group Co., Ltd. and other companies provide segmented product supply.
Industry Development History
The caustic soda industry in China began in the late 1920s. Before 1949, the average annual production of caustic soda was only 15 kt. After 1949, a series of improvements were made to electrolysis technology and supporting equipment on the basis of improving equipment production capacity. In the early 1970s, there was a significant innovation in anode materials in the caustic soda industry. During the 12th Five Year Plan period, the domestic caustic soda industry developed rapidly and its production capacity was fully released. During the 13th Five Year Plan period, the process optimization of the caustic soda industry accelerated. Since the 14th Five Year Plan, the caustic soda industry has focused on digital and green transformation, entering a stage of high-quality development.
Industry Policy Background
On March 28, 2022, the Ministry of Industry and Information Technology and other six departments jointly issued the Guiding Opinions on Promoting the High Quality Development of Petrochemical and Chemical Industry during the 14th Five Year Plan, which defined that by 2025, the production concentration of bulk chemical products will be further improved, and the capacity utilization rate will reach more than 80%. During the "14th Five Year Plan" period, the industry development centered on innovation, industrial structure and layout, Digital transformation and green safety.
Current status of industrial development
1. Caustic soda production capacity fluctuates and increases, with a scale exceeding 40 million tons
According to data from the China Chloroalkali Industry Association, the production capacity of China's caustic soda industry has shown a fluctuating upward trend in recent years; From 21.81 million tons in 2007 to 44.7 million tons in 2020. In 2021, China's caustic soda production capacity increased by 1.09 million tons, with an exit capacity of 715000 tons and a net increase of 375000 tons. The release of new production capacity was mostly distributed in the middle of the year, and the regional distribution was relatively scattered. The production capacity that landed in the fourth quarter was relatively small, and the domestic caustic soda production showed a stable, medium, and slight growth trend throughout the year. In the first half of 2022, China's caustic soda production capacity reached 43.09 million tons, of which 425000 tons were newly added and 75000 tons were eliminated. The eliminated production capacity includes 150000 tons that have not yet been put into operation after the relocation of Anhui Bayi Chemical and 25000 tons of Jiangsu Yanhai Chemical.
2. The market size of the caustic soda industry exceeds 140 billion yuan
In 2021, the overall performance of downstream caustic soda in China was mild, with the production of the main downstream alumina industry increasing compared to 2020. However, in the second half of 2021, the alumina production showed a continuous decline year-on-year from August to November. Affected by the tight shipping, China's import of Bauxite will decrease in 2021, and the use of domestic bauxite will increase, which will increase the unit consumption of caustic soda. The price game of contract orders negotiated between alumina enterprises and caustic soda enterprises is more obvious, and the price of liquid caustic soda purchased will be adjusted many times. In addition, due to multiple factors such as imported raw materials, poor export of end products, and sluggish domestic market performance, the overall operating load of the domestic viscose fiber industry is insufficient, and the demand for caustic soda is relatively low. The procurement of liquid alkali in the paper industry is mainly based on demand, and the operation of hoarding in large quantities is limited.
From January to November 2022, the apparent consumption of caustic soda in China's market was 33.46 million tons. According to the consumption and price calculation of caustic soda, the market size of China's caustic soda industry exceeded 80 billion yuan in 2021, and exceeded 140 billion yuan from January to November 2022.
Industry competition pattern
1. Regional competitive landscape
According to data from the China Soda Industry Association, the regional distribution of caustic soda production capacity is significantly affected by transportation costs. From the distribution of production regions, East China, North China, and Northwest China are the main production areas of caustic soda in China. In 2021, the caustic soda production capacity of the three regions accounted for 47.39%, 18.44%, and 15.72%, respectively, totaling 81.55%.
2. Competitive landscape of enterprises
Based on the production capacity data announced by various companies and combined with the production data of caustic soda in China in 2021, the ranking of caustic soda enterprises in China is calculated. At present, Zhongtai Chemical is a leading enterprise in caustic soda production in China, with a production proportion of 3.5% in 2021.
Future market scale of caustic soda industry: 150 billion yuan
According to the trend of consumption in the caustic soda industry in recent years, it is estimated that the consumption of caustic soda in China will exceed 35 million tons in 2023, and then exceed 38 million tons in 2028, with a corresponding scale exceeding 150 billion yuan.
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