1. Caustic Soda: basic chemical industry, widely used
1.1. Classification: liquid alkali and solid alkali
Caustic soda, namely sodium hydroxide, has strong alkalinity, strong corrosivity and strong hygroscopicity. The chemical formula of caustic soda is NaOH, also known as caustic soda and caustic soda. The chemical characteristics of caustic soda are strong alkalinity, strong corrosivity and strong hygroscopicity. In terms of corrosivity, caustic soda has corrosive effect on skin, fiber, glass and ceramics; In terms of moisture absorption, caustic soda is easy to dissolve in water. When dissolved, it releases a lot of heat to form an alkaline solution. At the same time, it is also easy to react with water vapor and carbon dioxide in the air, deliquescence and deteriorate. In addition, caustic soda is moderately toxic, and the combustion decomposition products may produce toxic and harmful gases. According to different appearance forms, caustic soda can be divided into liquid caustic soda and solid caustic soda. Liquid caustic soda is abbreviated as liquid alkali, that is, sodium hydroxide solution, which is a colorless and transparent liquid. According to the mass fraction of sodium hydroxide, it can be divided into 30% liquid alkali, 32% liquid alkali, 42% liquid alkali, 45% liquid alkali, 50% liquid alkali, etc., depending on the use of production process. At present, the general concentration of market production is 30-32% or 40-42%.
Solid caustic soda is abbreviated as solid caustic soda, and its main appearance is flake. Solid alkali is colorless and transparent crystal. According to the mass fraction of sodium hydroxide, it can be divided into 73% solid alkali, 95% solid alkali, 96% solid alkali, 99% solid alkali, 99.5% solid alkali and other series products. The alkali content is higher than that of liquid alkali. In terms of appearance, solid alkali can be divided into flake alkali and granular alkali. China's solid alkali market is dominated by flake alkali. The main reason is that flake alkali has the advantages of simple production process, low production cost, many application scenarios, large market demand and so on. The production process of granular alkali is more complex than that of flake alkali, with higher technical difficulty and relatively high price. In addition, there is a kind of barreled solid alkali in the market, which needs to break the barrel during use, which is more laborious, and the packaging cost is high, so it has been gradually replaced by flake alkali.
Except for different forms, the downstream application fields of liquid alkali and solid alkali are similar. Liquid alkali and flake alkali are essentially the same substance, and only the appearance and sodium hydroxide concentration are different. Compared with flake alkali, the concentration of liquid alkali sodium hydroxide is lower and the price is lower. In the production process, flake alkali can be obtained by subsequent processing of liquid alkali. At present, caustic soda production enterprises mostly ship in the form of liquid alkali. Therefore, in the industry research, we focus on the market situation of liquid alkali. Liquid alkali generally refers to ionic membrane liquid alkali with mass concentration of 32%, and flake alkali generally refers to solid caustic soda with mass concentration of 96%.
1.2. Industrial chain: raw salt is used upstream and widely used downstream
Caustic soda is the core product of chlor alkali industry, and there are many by-products in the production process. The main direct product of chlor alkali industry is caustic soda, and the rest are by-products produced in the production process, including chlorine and hydrogen, which are produced simultaneously in a certain proportion. There are many kinds of derivatives in chlor alkali industry, including high-purity hydrochloric ACID, industrial hydrochloric acid, polyvinyl chloride (PVC), sodium hypochlorite, etc. the correlation between products is large. There are more than 1300 downstream products, which has high economic extension value. Chlor alkali industry has a long history of development. Chlor alkali industry refers to the industrial production of chlorine (Cl2), hydrogen (H2) and caustic soda (NaOH) by electrolysis of saturated salt water (NaCl solution), and the production of a series of chemical products with them as raw materials. The chlor alkali industry first appeared in the 18th century. At first, chlorine was produced by heating manganese dioxide and hydrochloric acid together, and caustic soda was produced by the reaction of limestone and soda ash. Until the end of the 19th century, with the emergence of diaphragm method, electrolysis technology and the rapid development of industrialization, the chlor alkali industry gradually flourished.
Caustic soda is located in the middle reaches of the chlor alkali industry chain. Its upstream is mainly raw salt, and its downstream is widely used. Raw materials in the upstream of caustic soda industry chain are raw salt. In addition, hydropower resources are also required in the production process. According to the data of Baichuan Yingfu, 1.4-1.6 tons of raw salt, 6 tons of water and 2200-2600 kwh of electricity are consumed for each ton of caustic soda produced. At the same time, each ton of caustic soda produced will produce about 0.88 tons of liquid chlorine. There are many downstream applications of caustic soda, mainly including alumina, chemical industry, papermaking, printing and dyeing, petroleum, light industry, etc.
Raw salt is the main raw material in the upstream of caustic soda industry. China is rich in salt resources and is one of the world's largest producers and consumers of raw salt. They are mainly divided into three types: sea salt, well mineral salt and lake salt. Their production capacity accounts for 59%, 39% and 2% respectively in China, and the output of sea salt and well mineral salt accounts for 34% and 66% respectively. The product sales of raw salt mainly rely on two alkali industries, namely caustic soda and soda ash. In 2021, in the annual consumption structure of raw salt, the consumption of caustic soda industry accounted for 56.25%, accounting for more than half, the consumption of soda ash accounted for 37.02%, and others accounted for 6.73%.
Caustic soda is widely used in downstream industries. There are many downstream consumption fields of caustic soda, mainly including alumina, light industry, printing and dyeing, chemical industry, viscose staple fiber, papermaking, petroleum, etc. among them, alumina accounts for the largest consumption field, followed by chemical industry and light industry. In the chemical and light industry, the application of caustic soda is not limited to individual specific products, but is widely used in the whole industry, including Detergent, soap, glass, organic chemical industry, inorganic chemical industry, chemicals and other products.
1.3. Process: mature ion-exchange membrane technology
1.3.1. Caustic soda process change route
China's caustic soda industry began in 1929 and has a history of nearly 100 years. In 1929, China established the first caustic soda plant - Shanghai Tianyuan electrochemical plant, which was put into operation, opening a chapter in the development of China's caustic soda industry. Caustic soda production enterprises have grown from 9 before liberation to 158 today, and caustic soda production units have made great contributions. With the continuous development of China's caustic soda industry, both production technology and production equipment are becoming more and more advanced. In the history of caustic soda industry, two kinds of methods have been used, namely causticization and electrolysis. Caustic soda is produced by caustic soda aqueous solution and quicklime through caustic reaction, which is then replaced by electrolytic method. Electrolysis method is to produce caustic soda by direct current electrolysis of salt water, and produce by-products chlorine and hydrogen at the same time. According to the different materials of separation membrane used in the electrolysis process, the electrolysis method can be divided into two types, namely diaphragm electrolysis method and ion-exchange membrane electrolysis method. At present, ionic membrane electrolysis is widely used in caustic soda industry.
1.3.2. Traditional process: causticization and diaphragm process
Caustic soda is a traditional production process, which was mainly used before 2000. Caustic soda produced by causticization takes natural alkali as raw material and mainly depends on natural alkali mineral resources. The production cost is low and the economic benefit is high. Before 2000, causticization was widely used in China and the processing technology was mature. Around 2000, due to the limited alkali mineral resources and small output of causticization process in China, the national policy restricted it, and Chinese enterprises completely eliminated the production process. Caustic soda production from natural caustic soda mainly goes through four steps: causticization, evaporation, salting out and solid alkali packaging. In the causticization stage, 12% Na2CO3 soda solution shall be prepared in the causticization tank, quicklime shall be added, the causticization temperature shall be controlled at 95-105 ℃, causticization reaction shall be continuously stirred, and then brine cleaning solution shall be obtained through filtration. In the evaporation stage, the qualified brine cleaning solution is prepared, and the medium concentration evaporation and high concentration evaporation are carried out successively to remove the impurities of sodium sulfate, sodium carbonate and sodium chloride to obtain high concentration sodium hydroxide. In the salting out stage, the high concentration liquid is further precipitated into crystals, filtered and sent to the cold analysis barrel. The products that meet the standard are precipitated in the intermittent sedimentation tank. The last step is to pack the flake alkali.
In a period of time after caustic soda was eliminated, diaphragm electrolysis was used to replace caustic soda in China. Diaphragm electrolysis is a method to obtain caustic soda by using porous and permeable asbestos diaphragm as spacer, graphite as anode and iron as cathode to separate chlorine produced by anode from sodium hydroxide and hydrogen produced by cathode.
The main processes of diaphragm electrolysis include brine refining, brine electrolysis, electrolyte evaporation, chlorine treatment, hydrogen treatment and waste gas absorption. The quality requirements of refined brine are low, and only one refining is required. Add refined brine into the electrolytic cell and flow from the anode chamber into the cathode chamber. Chlorine is obtained in the anode chamber and electrolyte and hydrogen are obtained in the cathode chamber. In the diaphragm electrolyte, the content of sodium hydroxide is only 10.8%, and the content of sodium chloride is as high as 16.4%. Therefore, the four effect countercurrent evaporation technology with complex process is adopted when the diaphragm method evaporates the electrolyte, which has high energy consumption and difficult operation. During evaporation, about 10% of solid crystalline salt will be produced, which will cause serious wear and corrosion to the heating chamber. The average service life of the heating chamber is only about 3 years, which greatly increases the cost of diaphragm caustic soda. When treating chlorine, it needs to go through four processes: chlorine washing, cooling, demisting, drying and compression. When treating hydrogen, it needs to go through four processes: hydrogen washing, compression, deoxidation and drying.
Diaphragm electrolysis has many disadvantages, such as low production intensity, low product purity and high environmental pollution. At present, it has been replaced. The domestic diaphragm method uses small cells as electrolytic cells. With a production scale of 100000 tons / year, 168 to 200 electrolytic cells need to be installed, which covers a large area, is not conducive to centralized management, and the power loss of the system is large. At the same time, because China adopts fixed box metal anode diaphragm electrolyzer and ordinary asbestos diaphragm, the operating current density is low and the DC power consumption is high. When dealing with waste and waste liquid, the waste liquid washed by the diaphragm method when replacing the diaphragm needs to be treated before it can be discharged into the nearby water area; The discharged alkaline wastewater, chlorine containing wastewater and the feed liquid in the electrolytic cell shall be treated and recycled; The waste residue of salt mud can be treated and utilized. However, for the above wastes, most of China's production enterprises directly discharge the waste gas without treatment. Therefore, the diaphragm method has serious environmental pollution and low resource utilization.
1.3.3. Mainstream process: ion-exchange membrane method
At present, the ion exchange membrane electrolysis caustic soda process is mature and is the mainstream production method. Ion exchange membrane electrolysis is a way to separate the anode chamber and cathode chamber of the electrolytic cell by using perfluorosulfonic acid cation exchange membrane with stable chemical properties, so as to obtain caustic soda and chlorine. The electrolyte obtained after brine electrolysis in this method has high sodium hydroxide concentration and can be sold directly as liquid alkali. The process flow of ion-exchange membrane method is similar to that of diaphragm method. The process also includes brine refining, brine electrolysis, electrolyte evaporation, chlorine treatment, hydrogen treatment and waste gas absorption. Different from the diaphragm method, the ion-exchange membrane electrolysis method has higher requirements for brine and needs secondary refining. During brine electrolysis, refined brine is added to the anode of the electrolytic cell, and high-purity water is added to the cathode. After electrolysis, light brine and chlorine are obtained in the anode chamber, and electrolyte and hydrogen are obtained in the cathode chamber. The concentration of sodium hydroxide obtained in this step is high, generally up to 32%, while the content of sodium chloride is only 0.004%. In the electrolyte evaporation process, the process of ion-exchange membrane method is simpler, which only needs three-effect or two-effect evaporation.
Ionic membrane electrolysis is the development direction of electrolytic caustic soda, with significant advantages. Compared with diaphragm caustic soda, ion-exchange membrane caustic soda has less investment and less environmental pollution. The production cost of finished alkali mainly includes the cost of materials and power. In the diaphragm method, the materials used mainly include raw salt, calcium chloride, sodium carbonate, etc; Power mainly includes electricity and steam. In the ion-exchange membrane method, calcium chloride is replaced by barium chloride as the raw material. In 2009, the diaphragm method prevailed and the ionic membrane method gradually rose. At that time, the cost of the ionic membrane method was better than that of the diaphragm method. The cost of the diaphragm method was 1456 yuan / ton of sodium hydroxide, and the unit cost of the ionic membrane method was 1245 yuan / ton of sodium hydroxide, which was about 15% lower than that of the diaphragm method.
In terms of product quality, the impurity content of caustic soda produced by ion-exchange membrane method is lower. According to Qiao Yuyuan's article "comparative analysis of caustic soda production process by diaphragm method and ion-exchange membrane method", after more steps of evaporation treatment, the proportion of sodium hydroxide in the finished product of diaphragm method can be increased to more than 48%, meeting the production requirements, but there are still many sodium chloride impurities in the product, up to 1.5%. In contrast, the evaporation step of ion-exchange membrane method is simple, the content of sodium hydroxide is high, and the impurity content of sodium chloride is greatly reduced, only 0.007%. It is suitable for industries with high requirements for impurities, such as viscose fiber.
In terms of energy consumption, the unit energy consumption of ion-exchange membrane method is lower than that of diaphragm method. Due to the special structure of ion-exchange membrane, ion-exchange membrane electrolyzer has stronger selectivity and can obtain high-purity electrolyte. It not only reduces the DC power consumption, but also greatly reduces the steam consumption in the evaporation process of electrolyte. Although the diaphragm electrolysis method greatly optimizes the DC power consumption of the electrolytic cell by optimizing the diaphragm formula, improving the adsorption capacity and recoating the old anode, it is still higher than the power consumption level of the ion-exchange membrane method. According to Qiao Yuyuan's article "comparative analysis of caustic soda production process by diaphragm method and ion-exchange membrane method", in 2009, the diaphragm method required 2427kwh DC power per ton of sodium hydroxide, and the comprehensive energy consumption was 878kg standard oil; The DC power consumption of ion-exchange membrane method is 2266kwh, and the comprehensive energy consumption is 723kg standard oil, which is about 21% lower than that of diaphragm method.
Domestic ion-exchange membrane has been successfully developed, and China's chlor alkali industry has independent ability. Ion exchange membrane is the core of ion-exchange membrane electrolysis. For a long time, the production technology has been monopolized by the United States and Japan, but it has not been successfully developed in China for a long time. The high price of imported ion-exchange membrane and the fast replacement frequency of membrane in chlor alkali plant make it difficult for China's chlor alkali industry to develop for a long time. In 2004, the national development and Reform Commission issued a document to phase out the backward diaphragm process chlor alkali industry, providing a foundation for the development of China's chlor alkali industry. Until 2009, the perfluorinated ion-exchange membrane of Dongyue Group was successfully developed and tested, and China became the third country with the manufacturing technology of perfluorinated sulfonic acid carboxylic acid chlor alkali ion-exchange membrane. The key performance indexes of the latest generation of ion-exchange membrane DF2807 have successfully caught up with foreign countries, and the application effect is good. In the process of caustic soda production, the cell voltage is the key index to test the performance of ion-exchange membrane. The lower the cell voltage, the better the performance. According to Zong Shaojie's article "Application of Dongyue ion-exchange membrane DF2807", compared with similar foreign products, the average voltage of DF2807 is relatively reduced by 30mV. After one year of operation, the voltage of DF2807 tank increased by 40mv year-on-year, while that of similar foreign products increased by 80mv year-on-year.
1.3.4. Development trend: upgrading of ion-exchange membrane electrolysis technology
In recent years, the ion-exchange membrane electrolyzer has been upgraded continuously, and the new zero pole distance sub membrane electrolyzer has been widely used in caustic soda production. Compared with ordinary ion-exchange membrane electrolyzer, the effect of energy saving and emission reduction of zero pole distance sub membrane electrolyzer is more obvious. The specific reason is that the smaller the distance between the anode and cathode of the electrolytic unit, the lower the cell voltage and the lower the production power consumption. The electrode distance of ordinary electrolytic cell is 1.8 to 2.2mm. By improving the cathode structure and adding elastic mesh pad, the cathode mesh is pasted to the anode mesh, and the electrode distance is the thickness of ion film. Compared with ordinary ion-exchange membrane electrolyzer, under the same conditions, the voltage of zero electrode distance electrolyzer is reduced by about 180mv, and the power consumption per ton of caustic soda is reduced by about 252kwh. In addition to the zero electrode distance electrolytic cell, the oxygen cathode electrolysis technology is another advanced technology in the industry. Oxygen cathode electrolysis technology is designed according to the principle of fuel cell. Its cathode is special and uses porous gas diffusion material, which is called oxygen cathode (ODC). Under the action of direct current, oxygen reacts at the cathode to produce Oh - without producing hydrogen. Sodium chloride is ionized in the anode chamber, and Cl - is oxidized to form chlorine. Compared with the zero pole distance sub membrane electrolyzer, this technology has better effect of energy saving and consumption reduction, and the power consumption can be reduced by 30% in theory.
1.4. Current situation: China's self-sufficiency rate is high
China's imports of caustic soda are small, accounting for less than 1%. From 2017 to 2021, China's imports of caustic soda remained low, with a low proportion of imports. Among them, the lowest proportion of imports is 2017, the proportion of imports is only 0.03%, and the import volume is 10900 tons; The highest is 2019, with the import proportion of 0.29% and the import volume of 98600 tons. In 2021, China imported 54700 tons of caustic soda, accounting for 0.15%, an increase of 0.12 percentage points over 2017. Imports have a slight impact on the consumption of China's caustic soda industry. China is a net exporter of caustic soda, and its export volume accounts for a relatively low proportion in apparent consumption. From 2017 to 2021, China's export volume of caustic soda fluctuated in the range of 1.1 to 1.52 million tons, significantly higher than the import volume. Domestic self-produced caustic soda can meet the downstream demand; The proportion of exports fluctuates in the range of 3.15% - 4.40%. In 2021, China exported 1.4838 million tons of caustic soda, with a net export of 1.4291 million tons, only lower than the export level in 2017; Exports accounted for 3.86%, about 0.5 percentage points lower than that in 2017, with little impact on the domestic market.
2. Supply: limited capacity growth and tight supply in the future
2.1. China is a major producer of caustic soda in the world
China is a major producer of caustic soda, accounting for nearly half of the production capacity. According to the annual report of chlor alkali chemical industry, the global caustic soda production capacity in 2020 was 99.74 million tons / year, with a year-on-year increase of 2.40%. In 2020, the total capacity of caustic soda in China was 44.7 million tons / year, accounting for 44.82% of the global total capacity in that year. According to the data of China Chlor Alkali Industry Association, the annual capacity of caustic soda in China in 2018 was 42.59 million tons, accounting for 44.27%; North America ranks second in the global caustic soda production capacity, with an annual production capacity of 16.4 million tons, accounting for 17.05%; Europe ranks third, with an annual production capacity of 11.56 million tons, accounting for 12.02%. The production capacity of other countries or regions is less than 10 million tons.
2.2. Capacity growth is limited and concentration is expected to increase
2.2.1. Low speed growth of caustic soda production capacity
In recent years, the overall capacity of caustic soda industry has been released slowly. In terms of production capacity, in 2021, the production capacity of liquid alkali was 45.634 million tons / year, with a year-on-year increase of 1.42%, and the growth rate reached a new low in recent five years. Since 2017, the capacity of liquid alkali has increased steadily. Based on the annual capacity of 41.2 million tons in 2017, the compound annual growth rate is 2.59%. In terms of effective capacity, in 2021, the effective capacity of liquid alkali was 42.889 million tons / year, with a year-on-year increase of 1.45%. Over the past five years, the effective capacity of the industry fluctuated slightly. Based on the effective capacity of 40.94 million tons / year in 2017, the compound annual growth rate was 1.17%, with a slow growth.
In the future, the overall new capacity of caustic soda industry will be low. According to the data of Baichuan Yingfu, 13 enterprises plan to increase liquid alkali production capacity in 2022, with a maximum increase of 600000 tons for a single enterprise. The industry added 2.44 million tons of capacity, accounting for 5.35% of the total capacity in 2021. In 2021, seven enterprises announced plans to expand production, with a planned increase of 1.11 million tons and an actual increase of 350000 tons, with a completion rate of 31.5%. Assuming that this completion rate is maintained, it is expected that the liquid alkali will achieve a new capacity of 769000 tons in 2022, an increase of 1.68% over the total capacity in 2021, which is 0.91 percentage points lower than the compound growth rate in recent five years.
2.2.2. Capacity expansion is limited by policies
In 2007, the national development and Reform Commission issued the access conditions for chlor alkali industry, which made it difficult for small capacity enterprises to enter the market. According to the requirements of access conditions, the scale of new caustic soda plant must be more than 300000 tons / year, and it is difficult for small-scale enterprises to enter the market. At present, there are 102 enterprises with an annual capacity of less than 300000 tons, accounting for 61.82%, that is, before the release of access conditions, most of the new enterprises in the industry were small capacity enterprises. This condition greatly limits the new capacity projects in the industry and improves the industry concentration.
In 2016 and 2019, due to the impact of industrial structure adjustment, backward production capacity gradually withdrew. In July 2016, the guidance of the general office of the State Council on adjusting the structure of the petrochemical industry, promoting transformation and increasing benefits was issued. The opinion points out that the key task is to strive to resolve the excess capacity and strictly control the new capacity of excess industries such as calcium carbide, PVC and soda ash. The people's governments of Shandong, Inner Mongolia, Henan and other provinces have followed and issued the implementation opinions on adjusting the structure of the petrochemical industry, promoting transformation and increasing benefits. Subsequently, in October 2019, caustic soda was listed as a restricted industry in the Guiding Catalogue for industrial structure adjustment, which increased the capacity barrier of caustic soda industry and cleared out the capacity with small scale and poor technology.
Since the carbon neutralization target was put forward in 2020, the state has issued a series of relevant policies for the caustic soda industry. Caustic soda is listed as a restricted industry in the Guiding Catalogue for industrial structure adjustment issued in 2019. In November 2021, the national development and Reform Commission issued the benchmark level and benchmark level of energy efficiency in key areas of high energy consuming industries, which specified the benchmark level and benchmark level of energy efficiency of liquid alkali by ion-exchange membrane method in detail, and proposed that the proposed and under construction projects should strive to fully reach the benchmark level, and the stock projects should reasonably set the transition period for policy implementation. In February 2022, the national development and Reform Commission released the implementation guide for the transformation and upgrading of energy conservation and carbon reduction in key areas of high energy consuming industries. On the one hand, the document points out that by the end of 2020, the capacity of China's caustic soda industry with energy efficiency better than the benchmark level accounts for about 15%, and the capacity with energy efficiency lower than the benchmark level accounts for about 25%; On the other hand, it is proposed that by 2025, the proportion of capacity above the energy efficiency benchmark level in the caustic soda industry will reach 40%, and the capacity below the energy efficiency benchmark level will be basically cleared.
2.2.3. Industry concentration is expected to increase
The concentration of liquid alkali industry is low and the market competition is fierce. By the end of 2021, there were 158 liquid alkali enterprises with production capacity in China, with a large number of enterprises. According to the data of Baichuan Yingfu, among all production enterprises, there are only four enterprises with a capacity of more than 1 million tons / year, namely Xinjiang Zhongtai, Liaocheng Xinyuan group, Xinjiang Tianye and Haobang chemical, with a capacity of 1.35 million tons / year, 1.13 million tons / year, 1.1 million tons / year and 1.05 million tons / year respectively, accounting for 2.96%, 2.48%, 2.41% and 2.30% respectively; There are 10 enterprises with an annual production capacity of more than 600000 tons. The industry is dominated by small and medium-sized enterprises, Cr4 = 10.15%, CR10 = 20.23%, which is a competitive market.
Low energy production enterprises have withdrawn one after another, and low energy efficiency enterprises are about to be cleared out. In 2019, a total of 6 liquid alkali production enterprises were eliminated, and a total of 520000 tons were withdrawn. Among them, three enterprises with a production capacity of less than 300000 t / a have no production capacity and quit the market.
Low energy production enterprises are transforming to high capacity, and the concentration of liquid alkali industry is expected to increase. In 2020 and 2021, the number of high capacity enterprises will increase from 9 to 10, and the total capacity will increase from 8.48 million to 9.23 million tons; The number of low energy enterprises decreased from 103 to 102, but their total capacity increased. Some low capacity enterprises choose to withdraw from the market, while others are gradually changing to high capacity.
2.3. Output growth slows down and inventory runs at a low level
In recent years, the output of caustic soda has been relatively stable. In terms of liquid alkali, from 2017 to 2021, the output of liquid alkali increased from 34.2749 million tons to 35.8817 million tons, with a compound annual growth rate of only 1.15%. From 2018 to 2019, due to the introduction of supply side structural reform and other policies, the output increased negatively and decreased to 31.286 million tons. Then it rebounded steadily. In 2020 and 2021, the output increased by 7.10% year-on-year. In terms of flake alkali, from 2018 to 2021, the output of flake alkali increased from 4.6399 million tons to 4.7712 million tons, and the output was basically the same, with an annual compound growth rate of only 0.93%, which was lower than that of liquid alkali. Specifically, only in 2020, the output of flake alkali achieved positive growth, and the output decreased year-on-year in 2019 and 2021.
The capacity utilization rate of liquid alkali is basically stable, and the capacity utilization rate of flake alkali has declined in recent years. In terms of liquid alkali, in recent years, except that the capacity utilization rate of the industry was high in 2017, reaching 83.19%, the capacity utilization rate in the next four years ranged from 72% to 79%, with a small fluctuation range. Among them, the capacity utilization rate in 2021 was 78.63%, the highest in recent four years. In terms of flake alkali, from 2018 to 2021, the capacity utilization rate decreased from 80.55% to 70.06%, a decrease of more than 10 percentage points. Among them, only in 2020, the capacity utilization rate was high, 78.85%, which led to the increase of flake alkali output in that year. Overall, from 2018 to 2020, the capacity utilization rate of the two countries is relatively close. In 2021, the utilization rate of liquid alkali production capacity rebounded, flake alkali fell sharply, and the gap between the two increased.
Liquid alkali inventory has decreased compared with the past, and the recent low point has stabilized. Throughout 2019, the inventory of liquid alkali was relatively stable, maintaining around 185000 tons. By 2020, the amplitude of liquid alkali inventory will increase, the shock will intensify, and the fluctuation range will move upward as a whole. The annual maximum inventory will be 265000 tons and the minimum inventory will be 173100 tons. Since 2021, the overall inventory of liquid alkali has shown a downward trend. At the beginning of January 2021, the inventory was 239000 tons, and then it fluctuated downward, reaching the lowest point at the end of October 2021, with the inventory of 134000 tons. As of April 29, 2022, the inventory of liquid alkali has rebounded slightly, with an inventory of 171800 tons, but it is still at a low point in the long run, down 22.75% compared with the same period in 2020.
The inventory of flake alkali continues to decline and is currently close to the lowest point in history. From January 2020 to April 2020, the flake alkali storage experienced a significant increase and decline in a short time, and the volatility increased. Among them, from mid February to mid April, the inventory of flake alkali remained high, and the inventory continued to be more than 340000 tons. From May to September 2020, the inventory of flake caustic soda fluctuated at a low level, and the center remained around 130000 tons. Since then, the low level of flake alkali inventory stabilized, and the inventory remained below 100000 tons, showing a slow downward trend. As of April 29, 2022, the inventory of flake alkali was 19200 tons, a year-on-year decrease of 72.57%, a decrease of 83.66% compared with the same period in 2020, only 4200 tons higher than the historical lowest point.
3. Demand: the whole downstream is improving, and the high aluminum price drives the growth
3.1. China's economy as a whole is improving and the price index of chemical products is high
The national economic development will affect the demand growth rate of caustic soda industry. There are many downstream applications of caustic soda, including alumina, chemical industry, light industry, printing and dyeing, papermaking, viscose staple fiber, etc. In 2021, the consumption of caustic soda in papermaking, light industry and chemical industry accounted for 8.42%, 12.04% and 9.78% respectively, with a total of 30.24%. Therefore, the downstream demand of caustic soda is greatly affected by light industry and chemical industry.
China's overall economic growth is stable and fast. The most important indicator of a country's economic operation and development level is gross domestic product (GDP). Over the past 10 years, China's GDP and per capita GDP have continued to grow, maintaining a relatively stable growth rate. In 2021, China's GDP and per capita GDP were 114.37 trillion yuan and 80976 yuan respectively, with a year-on-year increase of 8.1% and 8.0% respectively. China's economy as a whole continued to improve. At the same time, according to the government work report released in March 2022, China's expected target for GDP growth in 2022 is about 5.5%.
Industrial added value continued to grow, and the growth rate accelerated in 2021. All industrial added value is an integral part of GDP, which reflects the newly added value generated by all production activities of industrial enterprises during the reporting period. Chemical industry and light industry belong to industry. Over the past 10 years, China's industrial added value has continued to increase. In 2021, China's total industrial added value was 37.26 trillion yuan, a year-on-year increase of 9.6%, which was significantly higher than the growth rate in 2020.
The added value of specific industries applying caustic soda has maintained positive growth in recent years. The industry classification and statistics method of light industry and heavy industry has been stopped in 2013. At present, light industry refers to food manufacturing, beverage manufacturing, papermaking and printing, chemical manufacturing, synthetic fiber manufacturing, daily chemical products and other industries. At the same time, these industries are also important fields of caustic soda application. In 2021, the added value of chemical raw materials and chemical products manufacturing industry, chemical fiber manufacturing industry, papermaking and paper manufacturing industry and food manufacturing industry increased by 7.7%, 7.2%, 6.3% and 8.0% respectively compared with 2020, and the growth rate was higher than that in 2020.
The price index of China's chemical products is high and is still in the upward channel. In order to enable industry practitioners and researchers to timely and accurately understand the prosperity of the chemical industry and predict the market trend, Sinopec released the China chemical product price index (CCPI), also known as the comprehensive index of chemical sales and customer procurement, on September 1, 2009. Since April 2020, CCPI has been in the upward channel. As of May 6, 2022, CCPI reported 5882 points, up 16.31% year-on-year and 77.54% year-on-year, indicating that the prosperity of China's chemical industry continues to rise.
3.2. Alumina is the main downstream, and the industry is expected to accelerate growth
Alumina is the largest consumption area in the downstream of caustic soda, accounting for nearly one-third. There are many downstream applications of caustic soda, among which alumina accounts for the largest consumption field. In the downstream consumption structure of caustic soda in 2021, alumina consumption accounted for 29.32%, with a total consumption of 10.5219 million tons of caustic soda. In recent years, the proportion of alumina consumption is relatively stable, accounting for 34%, 30.51% and 29.32% respectively from 2019 to 2021.
Industry supply and demand grew steadily. In 2021, the capacity, output and apparent consumption of China's alumina industry were 8924.00, 732770 and 76.5137 million tons respectively. On the supply side, alumina production capacity increased by 8.31% and output increased by 5.18% from 2017 to 2021, and the capacity utilization rate of the industry declined. On the demand side, the apparent consumption of alumina has increased by 5.56% in recent five years, slightly faster than the output growth, and the supply and demand situation of the industry is improving.
The import volume of the industry has increased in recent years, and the export volume has remained low. In terms of import, except that the import volume decreased significantly and the export volume increased significantly in 2018, the import volume of alumina in other years was much higher than the export volume. China is a net importer of alumina. At present, the domestic alumina output can not meet the downstream demand. In 2020, China's alumina imports increased significantly to 3.858 million tons, a year-on-year increase of 131.31%, exceeding 3 million tons for the first time, accounting for 5.29%. In 2021, China's import scale will be maintained, with an import volume of 3.3262 million tons, accounting for 4.35%. In terms of export, except that the export volume reached 1474800 tons in 2018, the export volume in other years was less than 300000 tons, accounting for less than 0.40%. The alumina produced in China is mainly used for domestic consumption.
3.2.1. Alumina production capacity expansion and obvious industry regionality
Alumina production capacity is highly concentrated and has significant regional characteristics. From the distribution of production areas, East China and North China are the main production areas of alumina in China. In 2021, the alumina production capacity of the two regions was 29.1 million tons / year and 27.29 million tons / year respectively, accounting for 32.61% and 30.58% respectively, with a total of 63.19%. According to the statistics of specific provinces, the top five provinces with alumina production capacity are Shandong Province, Shanxi Province, Guangxi Province, Henan Province and Guizhou Province.
The regional concentration of alumina production capacity is mainly due to the resource distribution characteristics of bauxite. The main bauxite producing areas are Guangxi, Henan and Shanxi, accounting for 79.52% of the national output. At the same time, as a coastal province, Shandong has many coastal ports, and Yantai port is the largest bauxite distribution center in China. Therefore, alumina production enterprises are relatively concentrated in areas with rich bauxite resources and high import volume, and the industry presents regional distribution. In the past few years, alumina production capacity has increased steadily and is expected to continue to rise in the future. From 2017 to 2021, the annual capacity of alumina continued to grow, and the growth rate was relatively stable. The annual production capacity of alumina increased from 82.39 million tons to 89.24 million tons, with a compound annual growth rate of 2.02%. Up to now, the production capacity has increased to 97.74 million tons / year in 2022, 6.1 million tons higher than that in 2021, with a growth rate of 9.52%. The growth rate has been much higher than that of alumina production capacity in the past few years, and it is expected that the subsequent production capacity will continue to increase.
In 2022, there will be more new alumina production capacity and the industry will expand rapidly. According to the disclosed production plans of various enterprises, it is estimated that 11.5 million tons of new capacity will be added in 2022, accounting for 12.9% of the total capacity in 2021. The industry is expanding rapidly, and the demand for caustic soda will increase rapidly. In 2022, a total of 7 enterprises plan to expand production, with a maximum increase of 4 million tons and a minimum increase of 400000 tons for a single enterprise, all of which are large-scale production plans.
3.2.2. Alumina output rebounded and capacity utilization recovered
Alumina output fluctuates slightly, with a large increase in 2021. From 2017 to 2020, alumina production fluctuated within a narrow range of 68.2 to 71.3 million tons. The output in 2018 was the highest in four years, reaching 71.2613 million tons. In the following two years, the output continued to decline, with a decline rate of 3.15% and 1.15% respectively. In 2021, the output of alumina reached 73.286 million tons, a new high in recent five years, with a year-on-year increase of 7.41%. Based on the output in 2017, the annual compound growth rate of alumina output is 1.27%, lower than the capacity growth rate.
Alumina capacity utilization has rebounded and has not yet returned to the highest level. From 2017 to 2018, alumina capacity utilization rates were 84.56% and 84.59% respectively, belonging to a high level. Then, from 2019 to 2020, the capacity utilization rate decreased continuously to 80.13% and 77.67% respectively. Therefore, although the alumina production capacity continued to rise from 2019 to 2020, the output decreased that year. In 2021, the capacity utilization rate rebounded significantly, rising by about 4.5 percentage points to 82.12% compared with 2020, but there is still room for improvement compared with the historical peak.
In the main alumina producing areas, the alumina operating rate in Henan and Shanxi decreased significantly. Before 2019, the operating rate of alumina producing areas was basically the same. Since 2019, the operating rates of Henan and Shanxi have decreased significantly, and the gap has gradually widened. In May 2020, the monthly operating rates of Shandong and Guangxi were as high as 95.57% and 89.42% respectively, while those of Henan and Shanxi were 74.98% and 58.17% respectively. In 2021, the monthly operating rate of Henan and Shanxi rebounded and stabilized at more than 70%. As of March 2022, the monthly operating rates of Henan and Shanxi are 78.85% and 71.43% respectively, which is still about 10 percentage points behind Shandong and Guangxi.
3.2.3. Alumina inventory stabilized at a low level and profit margin increased
Before August 2019, alumina inventory continued to fluctuate. At the beginning of 2018, the alumina inventory was 1.7016 million tons. Since then, the inventory has continued to fluctuate and changed sharply, but the center is basically stable, maintaining around 1.8 million tons. At the beginning of November 2018, alumina inventory decreased significantly, with the minimum inventory of 1.525 million tons, a record low; At the end of November, the inventory rebounded rapidly and recovered to 1.7 million tons again, continuing the previous fluctuation law. After August 2019, alumina inventory is relatively stable and is currently at a historical low. At the beginning of August 2019, the alumina inventory was 1810900 tons. Since then, the inventory level has been maintained for a long time, with a slight decline. By the end of July 2020, the inventory will be 1732800 tons. Since then, the inventory has decreased significantly. In late August 2020, the inventory was only 1.5638 million tons, 9.75% lower than that in July. Subsequently, the inventory rebounded slightly and stabilized in the range of 153-1.6 million tons from February 2021. As of May 6, 2022, the inventory was 1.675 million tons, at an all-time low.
Alumina is mainly used in the manufacture of electrolytic aluminum, and the consumption structure is stable. The downstream application fields of alumina are only electrolytic aluminum and non metallurgical aluminum. In 2021, the consumption of electrolytic aluminum accounts for 95%, and the consumption of non metallurgical aluminum accounts for 5%. Almost all alumina is used in the production of electrolytic aluminum. From 2018 to 2021, the consumption of electrolytic aluminum increased from 67.2631 million tons to 69.5752 million tons, with a compound growth rate of 1.13%. During this period, the consumption structure of alumina remained stable, and the proportion of electrolytic aluminum consumption remained above 95%.
Alumina prices have stabilized after rising. At the beginning of 2018, the price of alumina was 2853 yuan / ton, and then fluctuated downward. By the end of February 2020, the price was 2564 yuan / ton. Since March 2020, the price of alumina has continued to decline slightly, dropped to the lowest point of 2068 yuan / ton and then rebounded, and the price center has stabilized at 2350 yuan / ton. From August 2021, the price began to rise rapidly, from 2539 yuan / ton to 4102 yuan / ton, an increase of 61.56%, and then fell back and stabilized. As of May 6, 2022, the average market price of alumina is 2997 yuan / ton.
The price of electrolytic aluminum rose rapidly and was at an all-time high. Before February 2020, the price of electrolytic aluminum is stable, the price center remains around 13700 yuan / ton, and the fluctuation range is very small. Since March 2020, the price has risen rapidly after falling slightly, from 11708 yuan / ton in March to 24130 yuan / ton in October 2021, an increase of 106.10%. At present, the price of electrolytic aluminum has fallen slightly and is still in the upward channel. As of May 6, 2022, the average quotation is 20327 yuan / ton, which is at an all-time high. The price difference between electrolytic aluminum and alumina continued to rise, driving the improvement of profit space. Since April 2020, the price of electrolytic aluminum has continued to rise, up to 65.8%, and the growth momentum has not decreased. At the same time, the price increase of alumina is relatively small, and the price difference between the two continues to widen. It can be seen that the price difference trend is similar to that of electrolytic aluminum. The higher profit of electrolytic aluminum supports the demand for alumina and drives the demand for caustic soda, that is, the demand transmission mechanism of "electrolytic aluminum alumina caustic soda".
3.3. The demand for electrolytic aluminum has increased steadily and the downstream fields have made concerted efforts
The consumption of electrolytic aluminum shows an upward trend and has continued to grow at a high speed in recent two years. In 2017, the apparent consumption of electrolytic aluminum in China was 36.4992 million tons, which decreased slightly for two consecutive years. In 2020, driven by emerging downstream fields, the electrolytic aluminum industry developed rapidly. Even if it was hit by the epidemic, the consumption still increased significantly to 37.9177 million tons, a year-on-year increase of 7.71%. In 2021, the momentum of China's electrolytic aluminum industry remained the same, and the apparent consumption was 39.8906 million tons, an increase of 5.20% year-on-year. Based on the consumption in 2017, the compound annual growth rate is 2.25%, and the demand for electrolytic aluminum is gradually increasing.
3.3.1. The growth of the construction industry stabilized and the demand for alumina recovered
The consumption of electrolytic aluminum in the construction and real estate industry continued to increase. Electrolytic aluminum is mainly used for aluminum doors and windows, building curtain walls and decoration installed after construction in the field of construction real estate, which is highly related to the completion of real estate. From the consumption of electrolytic aluminum in the real estate industry, the demand for electrolytic aluminum in the real estate industry has continued to increase since 2019. In 2021, the consumption of electrolytic aluminum in the construction real estate industry was 10.7705 million tons, with a year-on-year increase of 5.20% and a compound annual growth rate of 6.45%.
In 2021, the real estate industry will be stable as a whole, and the demand for electrolytic aluminum will warm up. In 2021, the national investment in real estate development was 14.76 trillion yuan, an increase of 4.40% year-on-year; The new construction area of real estate was 1.989 billion square meters, a year-on-year decrease of 11.40%. The new construction area has experienced negative growth for two consecutive years; The construction area was 9.754 billion square meters, a year-on-year increase of 5.20%; The completed area was 1.014 billion square meters, a year-on-year increase of 11.20%. Compared with 2020, the construction and completed area of real estate has changed from negative growth to positive growth, and the real estate industry has warmed up. It is expected that with the improvement of the epidemic situation in China, the area of real estate commencement, construction and completion will increase, and the demand for aluminum is expected to continue to rise.
3.3.2. The production and sales of the automobile industry have recovered, and the prospect of new energy vehicles is broad
In 2021, China's automobile production and sales increased and became positive, with both production and sales booming. Transportation industry is another high consumption area of electrolytic aluminum. From 2017 to 2020, China's automobile production and sales decreased for three consecutive years, with a cumulative decrease of 13.06% and 12.35% respectively. In 2021, China's automobile output reached 26.082 million, a year-on-year increase of 3.40%; The sales volume reached 26.275 million vehicles, with a year-on-year increase of 3.81%, ending the downward trend for three consecutive years. According to wind data, in January and February 2022, China's automobile output increased by 1.38% and 20.58% year-on-year respectively, and the sales volume increased by 0.89% and 18.72% year-on-year respectively. China's automobile production and sales are booming, the boom has bottomed out and rebounded, and it is expected to maintain a growth trend in 2022.
The prospect of new energy trams is expected to promote the demand for electrolytic aluminum. In 2021, the output and sales volume of new energy vehicles increased rapidly, and the monthly production and sales volume increased by more than 110% year-on-year. The annual output totaled 3.5326 million vehicles, 169.67% higher than the output of 1.31 million vehicles in 2020, and the sales volume totaled 3.5072 million vehicles, 165.10% higher than the sales volume of 1.3229 million vehicles in 2020. The industry is developing rapidly, and the aluminum consumption of new energy vehicles is expected to increase significantly.
3.3.3. The demand for electricity is rising steadily, and the photovoltaic field continues to expand
The demand for electrolytic aluminum in the field of electric power is rising steadily, and will continue to increase with the development of UHV and other fields in the future. In 2021, the demand for electrolytic aluminum in the power sector was 4.7869 million tons, accounting for 12% of the total demand, an increase of 236800 tons compared with 2020, a year-on-year increase of 5.20%. Overall, the growth rate of electrolytic aluminum demand in China's power sector has been basically stable in recent three years, with an annual compound growth rate of 6.45%. Electrolytic aluminum is widely used in UHV and other projects. In the future, with the continuous construction of relevant projects, the aluminum consumption in the power industry may continue to increase.
China's capital construction investment has rebounded, and it is expected that there will be high growth during the 14th Five Year Plan period. In 2021, the capital construction investment of China's power grid was 495.1 billion yuan, an increase of 1.10% year-on-year, ending the downward trend for two consecutive years. According to the 2020 social responsibility report of the State Grid Corporation of China, the State Grid has completed and put into operation a total of 26 "14 AC and 12 DC" UHV projects, with a total length of 41000 kilometers of lines in operation and under construction, and a total power transmission of more than 1.6 trillion kwh. During the 14th Five Year Plan period, the State Grid planned to build the "24 AC and 14 DC" UHV project, involving more than 30000 kilometers of lines, 340 million KVA transformation capacity and a total investment of 380 billion yuan.
Emerging fields such as aerospace and high-end manufacturing have brought new growth points to the industry. In 2018, the Ministry of industry and information technology issued the first batch of application demonstration guidance catalogue of key new materials, which included eight new aluminum materials in the demonstration catalogue, including 7050 Alloy large-scale pre stretched thick plate, 7B50 alloy large-scale pre stretched plate, aluminum alloy processing materials containing Sc, profiles for aviation support framework, damage resistant aluminum alloy pre stretched plate, high-performance aluminum alloy sheet for vehicle, Al Si SC welding wire and aluminum lithium alloy welding wire. With policy support, the demand for aluminum alloy in emerging fields such as aerospace, high-end equipment, new energy vehicles and ship transportation is expected to gradually increase.
4. Trend: supply and demand expectations are tightening, and prices are entering the upward channel
4.1. Historical resumption of caustic soda price
In the first stage, the price of caustic soda operated stably and fluctuated slightly within the range. From 2013 to the middle of 2016, the price of caustic soda (32% ion-exchange membrane) was basically stable, with the lowest price of 620 yuan / ton in February 2015 and the highest price of 778 yuan / ton in January 2013. During this period, the domestic economy grew slowly, the industry continued to be in the process of structural adjustment, and the upstream and downstream markets operated smoothly. By June 2016, the price of caustic soda (32% ion-exchange membrane) was quoted at 653 yuan / ton.
In the second stage, the price of caustic soda rose to a historical peak. From the second half of 2016 to the end of 2017, the market price of caustic soda (32% ion-exchange membrane) continued to rise, from 653 yuan / ton to 1471 yuan / ton, an increase of 125.27%. In this stage, domestic environmental protection policies and safety policies were strengthened, and relevant documents on supply side structural reform were issued. The output of caustic soda decreases, the downstream demand increases, the contradiction between supply and demand increases, and the price of caustic soda rises all the way.
In the third stage, the price of caustic soda fell back to the low point again. From the beginning of 2018 to February 2021, the high price of caustic soda (32% ion-exchange membrane) fell from 1471 yuan / ton to 538 yuan / ton, a decrease of 63.43%, and the price hit a new low since 2013. At this stage, the downstream market demand is low, the supply of caustic soda industry exceeds the demand, and then superimposed with the impact of the epidemic, the operating rate of enterprises is insufficient, and the price of caustic soda continues to decline.
In the fourth stage, the price of caustic soda rose and is still at a medium high level. Since March 2021, the price of caustic soda (32% ion-exchange membrane) has risen rapidly, and reached the highest price of 1902 yuan / ton on October 26, an increase of more than 253%. Subsequently, the price fell to a relatively high level in the past, stabilized again and rose slightly.
4.2. The price is in the upward channel, and the gross profit of caustic soda increases rapidly
The price of caustic soda has been adjusted in place since the beginning of 2022 and is still in the rising channel. According to the data of Baichuan Yingfu, as of May 5, 2022, the average market price of liquid alkali (32% ion-exchange membrane) was 1297 yuan / ton, up 32.0% from the beginning of the year, and the average price of liquid alkali in the first quarter was 1114.6 yuan / ton, up 124.4% year-on-year; The average market price of caustic soda (99% flake soda) was reported at 4224 yuan / ton, up 22.8% from the beginning of the year. The average price of flake soda in the first quarter was reported at 4051.0 yuan / ton, up 106.7% year-on-year. The historical cost of caustic soda has been stable for a long time and has increased recently. From the beginning of 2018 to November 2020, the cost of liquid alkali is stable, and the price center of 100% cost is 1370 yuan / ton. From the end of November to the beginning of December 2020, the cost of liquid alkali increased significantly, from 1419 yuan / ton to 1652 yuan / ton. Since then, the cost of liquid alkali has been rising for a long time, and the growth rate is relatively stable. As of May 6, 2022, the 100% cost of liquid alkali was 1944.59 yuan / ton, an increase of 17.04% over the same period in 2021.
Upstream raw materials and salt prices have little impact, and the price difference is in the upward channel. At the beginning of 2018, the price of raw salt was 276 yuan / ton, and has remained basically stable since then. In mid September 2021, the price of raw salt exceeded 300 yuan / ton for the first time in nearly two years, and continued to rise to 480 yuan / ton within two months. Then, its price stabilized again and fell slightly. At present, the price of raw salt
