August 27 Caustic Soda Prices Firmly Rising in China

August 27 update

I. Price Trends

According to the commodity analysis system, on August 27, the price of caustic soda increased. The average market price in the Shandong region was 882 CNY/ton, up 9.16% compared to the same period last year. On August 26, the chemical index was 772 points, up 1 point from the previous day, down 44.86% from the highest point of 1400 points (October 23, 2021), and up 29.10% 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.)

2. Market Analysis

According to the commodity analysis system, the price of caustic soda has been steadily increasing. In Shandong, the mainstream market quotation for 32% ion-membrane caustic soda is around 800-910 CNY/ton. In Jiangsu, the caustic soda prices are stable, with the mainstream market quotation for 32% ion-membrane caustic soda around 870-930 CNY/ton. In Inner Mongolia, the caustic soda prices are consolidating, with the mainstream market quotation for 32% ion-membrane caustic soda (converted to 100%) around 2700-2800 CNY/ton. In the Shandong region, the price of caustic soda has increased. Previously shut-down facilities have not yet resumed operations, so the inventory pressure on enterprises is not significant. The main downstream companies have raised the purchase price of liquid caustic soda, leading to an increase in the regional liquid caustic soda prices. Aluminum oxide is mostly purchased according to demand, and non-aluminum buyers also mainly purchase according to their needs.

Analysts believe that recently, the caustic soda prices have shown a slight increase, with firm market performance. The recent domestic demand in China has been decent, and caustic soda producers are not facing significant inventory pressure. Some downstream companies are expected to undergo maintenance. Next week, plants in the northwest and southwest regions will resume operations after maintenance, leading to an increase in production capacity. In the north and east regions, some plants will reduce production, but the overall production capacity is expected to rise slightly. Considering the supply and demand dynamics, it is anticipated that the caustic soda market will maintain a stable trend, with specific developments depending on the downstream market demand.