On October 9th, the price of Caustic Soda fell below the support of 2790 yuan/ton, setting a new low since its listing. Yesterday night, the caustic soda continued to decline, with a decrease of 3.77%. As of 9:50 am today, the decline continued to expand to 5.40%.
Market news shows that during the National Day holiday, market pickup has further decreased and caustic soda inventory has accumulated. At present, the inventory of caustic soda is reported to be 322900 tons, an increase of 6.6% month on month. The inventory of liquid alkali in the Shandong region increased by 3.52% month on month.
In October, the maintenance of equipment was relatively concentrated, and the increase in supply was limited. However, the increase in demand was limited, coupled with the emergence of resistance, the caustic soda market continued to show slight weakness.
Expected price to maintain upward trend in the medium to long term
Although short-term prices have fallen, we are optimistic about long-term price increases. In late August, some units in eastern China resumed operation, while in early September, units in the northwest region gradually resumed operation. Currently, the operating rate has slightly recovered to 79%. From the perspective of future maintenance plans, the maintenance volume of caustic soda in September is limited, and the number of equipment restarts exceeds the planned maintenance volume. The expected start of construction has slightly increased, while the maintenance volume will increase again in mid to late October, with maintenance devices mainly concentrated in the North China region.
In addition, the price of aluminum oxide has increased, profits have increased, and the enthusiasm of aluminum oxide enterprises to start production has increased. The demand for caustic soda has increased, driving the demand for liquid caustic soda. Aluminum oxide enterprises in Henan, Shanxi, and Shandong have started to increase their purchase prices for caustic soda. Chlor-alkali enterprises are currently shipping well, and there is still room for improvement in aluminum oxide production capacity during the golden nine silver ten peak seasons. The initial production of caustic soda has decreased, and the demand for main downstream alumina has remained near the historical highest level. The inventory of caustic soda has continued to decline, maintaining near the low level within the year. The price of caustic soda continues to rise and supply increases, but shipments to alumina enterprises may decrease, and the price increase may be temporarily postponed.
Afterwards, it is expected that as alumina enterprises increase their procurement prices, other downstream enterprises are also in peak demand season, and the demand for caustic soda will further increase. The maintenance volume of caustic soda devices on the supply side will once again increase, and it is expected that prices will maintain an upward trend in the medium to long term.
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