Since mid-January, Shandong's liquid caustic soda market price has shown a steady downward trend. However, with chlorine-consuming downstream sectors like PVC operating at high capacity, consumption of byproduct liquid chlorine remains robust. In mid-to-late January, Shandong's liquid chlorine market price remained elevated at 350 RMB/ton. Chlor-alkali enterprises adopted a “chlorine-to-alkali” strategy, enabling theoretical profits to stay within the profitable range and supporting high operating rates. In February, Shandong's liquid chlorine prices softened, shifting chlor-alkali profits from positive to negative. On February 9, Shandong's liquid chlorine market price plunged by CNY250 to 50 per ton, deepening theoretical losses for chlor-alkali enterprises. Although no production cuts are currently planned, the low profit margin has intensified market expectations for large-scale maintenance in the future, easing bearish sentiment. Intraday futures prices rose with reduced positions, diverging from spot trends and widening the spot discount.

Based on current maintenance schedules, chlor-alkali plants have relatively few planned shutdowns from February to March, with industry operating rates expected to remain elevated. Recently, some downstream alumina producers have conducted maintenance due to environmental factors and flexible production, leading to a slight decline in alumina operating rates. Non-aluminum downstream sectors, having completed earlier restocking, have seen inventory replenishment demand weaken as the Spring Festival approaches. Following seasonal inventory buildup during the holiday period, high caustic soda inventories post-festival are expected to exert sustained downward pressure on prices. Decisions by chlor-alkali producers to reduce operating rates or cut production may ultimately dictate the future trajectory of caustic soda prices.

The logic of “liquid chlorine price decline → intensified chlor-alkali losses → heightened maintenance expectations” has recently caused caustic soda futures and liquid chlorine spot prices to exhibit a seesaw pattern. However, in the medium to long term, the sustainability and scope of caustic soda futures' rebound may hinge on the actual implementation of chlor-alkali plant maintenance. Should maintenance scale remain modest from March to April, caustic soda futures could potentially decline to close the basis in the future.

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