This week's caustic soda prices declined (9.22-9.26)

September 26, News

I. Price Trends

According to the commodity analysis system, the caustic soda prices showed a downward trend this week. At the beginning of the week, the average market price was 838 CNY/ton, and by the end of the week, it had dropped to 834 CNY/ton, marking a decrease of 0.48%, with a year-on-year increase of 0.12%. On September 25, the chemical index stood at 765 points, unchanged from the previous day, showing a decline of 45.36% from its peak within the cycle at 1400 points (on October 23, 2021), and an increase of 27.93% from the lowest point on April 8, 2020, at 598 points。 (Note: The cycle refers to the period from December 1, 2011, to the present).

II. Market Analysis

According to the commodity analysis system, the caustic soda prices fell over the weekend this week. In Shandong, the mainstream market quotation for 32% ion-membrane caustic soda is around 760-850 CNY/ton. The price of caustic soda in Jiangsu remains stable, with a mainstream market quotation for 32% ion-membrane caustic soda at about 890-990 CNY/ton. In Inner Mongolia, the caustic soda price is consolidating, with a mainstream market quotation for 32% ion-membrane caustic soda (converted to 100%) at approximately 2700-2800 CNY/ton. From the perspective of the Shandong region, supply is relatively ample. The price of low-concentration caustic soda in Shandong is under pressure, and due to the continuous decline in domestic and international alumina prices recently, the profit margin of Chinese alumina enterprises has been continuously narrowing. Therefore, downstream alumina purchases are mainly on-demand, and non-aluminum purchases are also mostly based on demand. Additionally, with the approach of National Day, caustic soda companies have softened their prices to reduce inventory, but overall, the trend is expected to be mainly consolidation in the future.

Analysts believe that recently, the caustic soda prices have been operating in a weak trend. The price of caustic soda has been relatively weak, and recently, downstream sectors in China have mostly purchased according to demand. Caustic soda enterprises have relatively ample inventories. Considering the balance between supply and demand, it is comprehensively expected that caustic soda will maintain a consolidation operation trend in the later period, which will specifically depend on the demand from the downstream market.