Price trend

According to data from SunSirs, caustic soda prices were generally weaker in September. The average price of caustic soda in Shandong Province was 890 RMB/ton at the beginning of the month and 832 RMB/ton at the end of the month, a 0.52% decrease and a 0.12% decrease compared to the same period last year.

On September 29th, the SunSirs Chemical Industry Index was 765 points, down 1 point from the previous day, down 45.36% from its intra-cyclical high of 1,400 points (October 23, 2021), and up 27.93% from its intra-cyclical low of 598 points on April 8, 2020. (Note: The intra-cyclical period refers to the period from December 1, 2011 to the present.)

Analysis review

According to a survey by SunSirs, caustic soda prices were generally weaker. In Shandong Province, the mainstream market price for 32% ion-exchange membrane caustic soda was around 750-820 RMB/ton. In Jiangsu Province, prices are stable, at around 890-970 RMB/ton. In Inner Mongolia, prices were temporarily stable, at around 2,700-2,800 RMB/ton (Equivalent to 100%). This month, caustic soda prices were declining, with the main decline seen in Shandong Province. Alumina prices continued to fall both domestically and internationally, shrinking profit margins for domestic alumina manufacturers. Consequently, downstream manufacturers were procuring more on-demand alumina, and non-aluminum imports were also sourcing on-demand. Supply was relatively ample. Low-concentration caustic soda prices were under pressure in Shandong Province, and alumina prices had continued to fall both domestically and internationally. Furthermore, due to the National Day holiday, caustic soda manufacturers had softened their prices to reduce inventory. However, overall, prices were expected to remain in a period of consolidation.

Market outlook

Analysts of SunSirs believe that caustic soda prices had been weak. Domestic downstream demand has been generally weak, and caustic soda companies were facing ample inventory and significant pressure to deplete their inventory. Downstream alumina prices were likely to remain stable but slightly weaker. Based on the balance of supply and demand, caustic soda prices are expected to remain in a consolidating trend in the future, depending on downstream market demand.

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