1. Basic situation and competition situation of Caustic Soda industry
(1) Overview of caustic soda products
Caustic soda, also known as sodium hydroxide (NaOH), is a highly corrosive strong alkali that can be divided into liquid alkali and flake alkali in form. Caustic soda is an important basic chemical raw material. Its downstream application fields are extremely wide, including paper making, soap, dye, rayon, aluminum making, petroleum, food processing, wood processing and machinery industry.
(2) Market competition situation of caustic soda
① Global market
In the past decade, the overall growth rate of global caustic soda production capacity has fluctuated between 4-6%. In 2012, there was a significant expansion of global caustic soda production capacity, with a growth rate of nearly 10%. Since 2013, the global growth rate of caustic soda has gradually slowed down and bottomed out in 2016. Since then, the global caustic soda has regained its growth pattern.
As of the end of 2022, the global production capacity of caustic soda has reached 103.52 million tons. The production capacity is mainly concentrated in the Asian region, which accounts for approximately 63.7% of the global market; China has the largest proportion of production capacity, accounting for approximately 45.6% of the global total. North America and Western Europe account for 15% and 12% respectively, ranking second and third.
② Domestic market
Caustic soda is one of the most traditional industrial products in China. Since the 1990s, national macroeconomic policies have attached great importance to the development of the domestic chlor alkali industry, and the caustic soda industry has developed rapidly. By the end of 2006, China had become the country with the largest caustic soda production capacity in the world.
According to statistics, as of the end of 2022, China's total production capacity of caustic soda amounted to 46.575 million tons, a net increase of 1.495 million tons compared to 2021, accounting for about 45% of the world's total production capacity. The production capacity of caustic soda ranks first in the world, and the overall production capacity of caustic soda is relatively stable. Affected by economic fluctuations, the growth rate of China's caustic soda production has slowed down in 2022. According to the statistics of China Chlor-Alkali Network,
In 2022, the cumulative production of caustic soda in China was 39.805 million tons, a year-on-year increase of 1.4%. By the end of 2022, there are 164 caustic soda production enterprises in China. The average annual capacity of a single enterprise has increased from 220000 tons in 2013 to 286000 tons at present, and the industrial concentration ratio has been improved. According to statistics from China Chlor-Alkali Network, in 2022, the top three regions in China's caustic soda production capacity were North China, Northwest China, and East China, accounting for approximately 80% of China's total production capacity.
(3) Supply and demand situation of caustic soda market
China is the world's most important producer and consumer of caustic soda. With the rapid development of China's economy, the consumption of caustic soda in China has also shown a rapid growth trend, with a demand of over 37 million tons in 2021. From 2014 to 2021, the demand for caustic soda in China maintained a stable growth.
According to statistics, the apparent consumption of caustic soda in China in 2022 was 36.3165 million tons, a slight decrease compared to 2021. Under the influence of the "dual carbon" and "two high and one capital" policies, policy barriers in the domestic caustic soda industry have increased, and the caustic soda industry has entered a policy dividend period; In 2022, the downstream demand will be stable, the export will be good, and the market price of caustic soda will be at a historical high.
(4) Consumption structure and trend of caustic soda products
As an important basic chemical raw material, caustic soda is widely used in metal smelting such as alumina, medicine, papermaking, textile printing and dyeing industry, and soap manufacturing industry. The demand in the alumina field accounts for 32%, chemical industry 16%, papermaking 12%, and textile printing and dyeing 11%. In recent years, there has been a significant increase in alumina production capacity, which has correspondingly driven an increase in demand for caustic soda.
(5) The trend and reasons for changes in the profit level of caustic soda
① Production cost composition of caustic soda
The production cost of caustic soda mainly includes raw salt, electricity, water, and labor. Electricity and raw salt are the most important factors affecting the cost of caustic soda.
② The price of caustic soda
China's caustic soda production capacity is enormous, and changes in supply and demand are the key factors affecting the price trend of caustic soda. Since the first batch of the second round of central ecological and environmental protection inspection team was fully launched on July 8, 2019, and after the end of the sixth batch of the second round on March 22, 2022, China has completed the full coverage of the second round of central ecological and environmental protection inspection in three years. Most caustic soda manufacturers have reduced their operating rates due to environmental supervision, leading to a continuous increase in caustic soda prices since 2021.
According to the Implementation Guidelines for Energy Conservation and Carbon Reduction Transformation and Upgrading in Key Fields of High Energy Consumption Industries (2022 Edition) issued by the National Development and Reform Commission, by 2025, the proportion of production capacity above the energy efficiency benchmark level in the caustic soda industry will reach 40%, and production capacity below the energy efficiency benchmark level will be basically cleared, which will to some extent drive the price of caustic soda to rise.
