Price trend

According to SunSirs' commodity analysis system, caustic soda prices showed a weak trend this week. The average market price at the beginning of the week was 628 RMB/ton, and the average market price at the end of the week was 622 RMB/ton, a decrease of 0.96%, and a year-on-year decrease of 38.72%.

On February 5th, SunSirs' chemical index was 797 points, a decrease of 2 points from the previous day, a decrease of 43.07% from the highest point of 1,400 points (October 23, 2021) in the cycle, and an increase of 33.28% from the lowest point of 598 points on April 8, 2020. (Note: The cycle refers to the period from December 1, 2011 to the present.)

Market analysis

According to the commodity analysis system of SunSirs, caustic soda prices weakened last week. In Shandong province, the mainstream market price for 32% ion-exchange membrane caustic soda was around 550-650 RMB/ton. In Zhejiang province, caustic soda prices remained stable, with the mainstream market price for 32% ion-exchange membrane caustic soda around 850-970 RMB/ton. In Inner Mongolia, caustic soda prices consolidated, with the mainstream market price for 32% ion-exchange membrane caustic soda around 2,200-2,300 RMB/ton (on a 100% basis). Last week, the supply of caustic soda remained ample, and companies did not significantly reduce their inventory. The overall operating rate of liquid caustic soda in Shandong remained high, and the chlor-alkali industry's profits were not high, providing support from the cost side. Downstream alumina producers showed moderate purchasing activity recently. Due to weather conditions and reduced stockpiling for the Spring Festival in northern China, the market remained in a stalemate, with most purchases of caustic soda being made on an as-needed basis. It is expected that the alumina market will fluctuate with a downward bias in the near future.

Market outlook:

According to analysts at SunSirs, caustic soda prices remained weak last week. Domestic downstream buyers were temporarily purchasing on an as-needed basis, and there was no positive support in the Shandong market, with no substantial improvement in demand. Order quotations outside of Shandong Province had largely concluded, and the focus was now on fulfilling long-term contracts, resulting in a supply-demand stalemate. Overall, it is expected that caustic soda prices will continue to maintain a weakly consolidating trend in the future, depending on downstream market demand.

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