In August, the domestic flake alkali market continued the upward trend in July, and the price continued to rise. Under the condition that it was not optimistic in the early stage, why did the flake alkali price continue to rise one after another, and what were the driving factors behind it?
Since July, the price of domestic flake alkali has continued to rise. According to Zhuo Chuang's monitoring, taking Wuhai area of Inner Mongolia as an example, the mainstream ex factory price of 99% flake soda increased from 1700-1750 yuan / ton in early July to 2300-2400 yuan / ton at present, with an increase of 600-650 yuan / ton, an increase of 36.23%. Zhuo Chuang believes that the driving factors behind the second round of domestic flake alkali price rise are mainly the following aspects:
First of all, periodic continuous maintenance at the supply end is the primary factor. From late July to early September, almost all important molten salt flake alkali production enterprises, including Xinjiang Zhongtai chemical, Xinjiang Tianye, Shandong Binhua, Zhongyan Jilantai, Inner Mongolia Yihua, Inner Mongolia Zhonggu mining, Inner Mongolia Junzheng, Ordos chlor alkali, Ningxia jinyuyuan, Qinghai Yihua and Inner Mongolia Yili Chemical, have arranged shutdown and maintenance, The supply side of flake alkali continues to be in an abnormal state, and the continuous boost of the supply side has a significant boost to the market price.
In terms of specific market performance, the maintenance of flake alkali enterprises and power restriction in some time periods have led to insufficient operation of flake alkali units and continuous shortage of commodity volume. Some upstream factories have said that due to maintenance, the actual order volume to alumina plants is less than expected, and the delivery in some months is not completed, As a result, the standing inventory of Caustic Soda, including terminal demand such as alumina plant, is insufficient, and the purchase intention continues to exist, which brings positive stimulation to both the pre-sale order quantity and the mentality of the plant. Up to now, the pre-sale orders of mainstream flake alkali plants in Xinjiang have been received until October, and the pre-sale orders of flake alkali enterprises in Inner Mongolia have been basically received until mid to late September. The pre-sale situation is generally good.
Secondly, the largest downstream alumina industry received orders well, which brought strong rigid support to the market demand for flake alkali. In the downstream of flake caustic soda, the demand for alumina can undoubtedly occupy half of the country. During this period, the overall operating load rate of alumina was relatively stable. The average operating load rate operated in the range of 77% - 79% (statistical caliber also showed that it operated in the range of 84% - 85%), and its price performance was also commendable. According to Zhuo Chuang monitoring, taking Shanxi as an example, the local alumina market price rose from 2490-2530 yuan / ton in early July to 2800-2840 yuan / ton, and there is still a certain increase. People in the industry said that the alumina market price is expected to exceed 3000 yuan / ton. The continuous rise of alumina price will undoubtedly have a positive impact on the increase of caustic soda price.
On the other hand, in recent years, the caustic soda products of chlor alkali plants in Northwest China have been adjusted differently, and some liquid alkali commodities have also been transformed into flake alkali in recent years, resulting in a decrease in the overall commodity volume of liquid alkali compared with previous years, resulting in a certain compression of the selectivity of alumina plants in purchasing liquid alkali. In addition, the concentration of domestic flake alkali industry is high, mainly concentrated in northwest Xinjiang, Inner Mongolia, Ningxia, Shaanxi and eastern Shandong. Once there is centralized maintenance in key production areas, its impact on flake alkali price is also obvious.
In conclusion, the driving factors behind the continuous rise of flake alkali are mainly the phased continuous maintenance at the supply end and the strong support of downstream alumina orders, followed by the influence of industry attributes and market mentality, resulting in the continuous rise of flake alkali price. Judging from the current pre-sale of the plant and the order receiving at the demand side, the price of flake soda will continue to be high and strong, and the space for further increase is expected to still exist.
