In 2023, the overall supply and demand of Caustic Soda in China will increase.
one
Analysis of caustic soda supply
1. Change of caustic soda production capacity in China
Driven by the rapid development of China's economy, the capacity of caustic soda as the basic chemical raw material of the national economy has increased rapidly. According to the data, the capacity of caustic soda increased from 23.751 million tons in 2007 to 45.54 million tons in 2022, with an increase of 91.74%. The output increased from 17222300 tons to 39.482 million tons, with an increase of 129.25%. The period from 2007 to 2012 is the rapid development stage of caustic soda, with an average annual growth rate of more than 8%. After the rapid expansion of production capacity, the chlor-alkali market experienced a phased oversupply, and the growth rate slowed down. Under the supply-side reform, inefficient and backward production capacity gradually cleared up, and the production capacity and output increased negatively in 2015. In recent years, caustic soda has entered a stable development stage. As a high energy consumption and high pollution industry, under the "double carbon" goal, the capacity expansion of caustic soda is strictly restricted.
Due to the continuous expansion of downstream demand, the capacity of caustic soda industry is still growing slowly. The planned new capacity of caustic soda in 2022 is nearly 2.5 million tons, but due to the macroeconomic downturn and the disturbance of the epidemic situation, the actual production is less than expected, and finally 1.88 million tons of capacity will be put into production. The planned production capacity that will not be put into production in 2022 and the planned new production capacity in 2023 will be more than 3 million tons. The actual production situation will continue to follow up. In the 2023 production plan, there are five enterprises with a scale of more than 300000 tons, mainly distributed in North China, East China and Northwest China.
2. Factors affecting the supply of caustic soda
According to the historical operating rate of caustic soda in recent years, except for the obvious decrease in operating rate in August and September, the operating rate in other months basically fluctuated in the range of 80% - 87%. There are three main factors affecting the supply of caustic soda: unit maintenance, environmental protection and demand for liquid chlorine.
The overhaul of the chlor-alkali unit is not required to be too frequent. Generally, the overhaul is conducted every 2-3 years. The enterprise can reasonably arrange the overhaul time according to the prediction of the future market supply and demand pattern, including the environmental protection policy requirements and the market demand of the combined product liquid chlorine. Generally, large chlor-alkali enterprises will arrange to stop production line by line for maintenance, lasting about 1 month; Small and medium-sized chlor-alkali enterprises generally need to stop for 7-14 days for maintenance.
Safety and environmental protection inspection: the chlor-alkali industry is the key industry in the safety and environmental protection inspection because of its high energy consumption and high pollution characteristics. In addition, the liquid chlorine of the co-production product is a highly irritant and corrosive liquid, and the chlorine gas will also cause poisoning after inhalation by human body, which has a greater risk. In recent years, the inspection of safety and environmental protection has been intensified, especially in East China, where the inspection of safety and environmental protection has a relatively large impact on enterprise production.
In addition, chlor-alkali balance has always been a relatively headache for chlor-alkali enterprises, especially for enterprises without downstream supporting devices. Because liquid chlorine is not easy to store, when the market is seriously surplus, enterprises need to pay a discount to deal with chlorine gas and lower their profits. Therefore, the operating rate of chlor-alkali enterprises will also be partially affected by the demand for liquid chlorine. Autumn, winter and Spring Festival are generally the peak demand seasons for liquid chlorine, and the corresponding operating rate of chlor-alkali will also rise.
two
Analysis of caustic soda demand
1. Changes in demand for caustic soda in China
China is a major consumer of caustic soda, accounting for 45.7% of the total global consumption. From 2012 to 2021, the consumption of caustic soda in China increased from 24.92 million tons to 36.95 million tons, an increase of 48.27%. In 2022, the domestic consumption of caustic soda will be about 36165200 tons, down 3.5% from last year. Although some of the downstream areas of caustic soda were put into production last year, the overall consumption was still lower than that in 2021, mainly due to two reasons: first, due to the geographical trade friction, the export of paper products, aluminum products, clothing and other end consumer goods fell sharply; second, due to the disturbance of domestic epidemic, the physical demand decreased, and caustic soda enterprises in many fields temporarily cut production and stopped production and spread to the upstream and downstream, affecting the normal production and demand order in the downstream.
2. Situation of downstream caustic soda industry
The downstream of caustic soda is relatively scattered, and the largest downstream demand is alumina, followed by chemical, paper (pulp), printing and dyeing chemical fiber, Water Treatment, light industry (except paper), medicine and other industries. The demand for alumina accounts for about 35% of the total demand for caustic soda, accounting for one third of the total demand. It is also an industry with rapid expansion of downstream capacity of caustic soda in recent years. One ton of alumina corresponds to about 0.15 tons of caustic soda demand. There is a large difference between domestic ore and imported ore. In 2022, the use of domestic ore will increase, and the corresponding demand for caustic soda will also increase. 95% of China's aluminum oxide is used in the electrolytic aluminum industry. The sharp rise in aluminum consumption has driven up the demand for aluminum oxide. By the end of December 2022, China's alumina production capacity was 96.75 million tons, an increase of 9.20% over the previous year, and the operating capacity was 75.44 million tons, corresponding to the national operating rate of 78%. In 2022, a total of 10.3 million tons of new production capacity was put into operation. The rapid production of alumina formed a certain support for the demand for caustic soda. In addition to alumina, there are still some new capacity expected to be put into production in other energy industries (lithium battery, etc.) and paper (pulp) industries, and the demand for caustic soda will increase to a certain extent.
three
Analysis of import and export of caustic soda
China is a net exporter of caustic soda. In the past, the export volume was between 1 million and 2 million tons. In 2022, China's caustic soda export reached 3.26 million tons, an increase of 1.78 million tons or 120% compared with 2021. On the one hand, the increase in export volume is due to the periodical tension of foreign liquid caustic soda and the increase in foreign orders. On the other hand, the price of foreign energy has risen sharply, and the cost increase has made the price of foreign caustic soda continue to be higher than the domestic price. The market competitiveness of China's caustic soda has increased, and the increase in export sources has been significant. China's exports of caustic soda are mainly liquid caustic soda. In 2022, China's exports of liquid caustic soda will reach 2.46 million tons, accounting for about 75% of the total exports. Compared with exports, the import volume of caustic soda in China is insignificant and remains low for a long time. In 2022, the import volume of caustic soda in China is less than 10000 tons, which has little impact on the price.
With the fall of energy prices in Europe and the United States, the cost of overseas caustic soda will decrease, and the price will also fall. In addition, due to the expected impact of overseas recession, China's caustic soda export volume is expected to decline to a certain extent in 2023. However, from the current situation, China's prices are still attractive in overseas markets. Therefore, it is expected that although the export volume of caustic soda this year will drop compared with 2022, it will still have a large increase compared with 2021.
Overall, in 2023, China's caustic soda will show a pattern of double increase in supply and demand. In terms of supply, China plans to put more than 3 million tons of production capacity on the market in 2023, mainly in North China and East China. However, the production capacity planned to withdraw from the market is very small, and the supply continues to increase steadily. In terms of demand, as the largest downstream of caustic soda, alumina production capacity has increased rapidly in recent years. Although there will be new production capacity for alumina in 2023, and the demand for caustic soda will further increase, the demand for downstream electrolytic aluminum is relatively limited, and alumina will gradually evolve into a pattern of oversupply. Other downstream demand industries such as viscose staple fiber, paper making, printing and dyeing, with the recovery of the domestic economy, the situation of domestic consumer goods will improve on a month-on-month basis compared with 2022, but the terminal export is still not optimistic. From the perspective of the import and export of caustic soda, it still maintains a net export status, and the export volume will fall back from last year, but the overall level is still above the average level in recent years.
