This week, the caustic soda price showed a weak trend (1.19-1.23) in China

January 23rd, News

I. Price Trends

According to the commodity analysis system, the caustic soda prices showed a weak trend this week. At the beginning of the week, the average market price was 690 CNY/ton, and by the end of the week, it had dropped to 668 CNY/ton, a decrease of 3.19%, and a year-on-year decrease of 32.86% compared to last year. On January 22, the chemical index was at 787 points, an increase of 2 points from the previous day, a decrease of 43.79% from the highest point of 1400 points (October 23, 2021), and an increase of 31.61% from the lowest point of 598 points on April 8, 2020. (Note: The period refers to the time from December 1, 2011, to the present.)

II. Market Analysis

According to the commodity analysis system, the caustic soda prices were weak this week. In Shandong, the mainstream market price for 32% ion-membrane caustic soda is around 590-690 CNY/ton. In Jiangsu, the caustic soda prices are stable, with the mainstream market price for 32% ion-membrane caustic soda around 700-810 CNY/ton. In Inner Mongolia, the caustic soda prices are consolidating, with the mainstream market price for 32% ion-membrane caustic soda (on a dry basis) around 2150-2250 CNY/ton. This week, the supply of caustic soda remains loose, and inventory clearance by companies is not significant. A few production units reduced output but quickly resumed. The recent market entry enthusiasm for alumina, a downstream product, has been moderate. In the north, due to weather conditions and the gradual reduction in pre-holiday stockpiling, the market is still in a stalemate, with caustic soda being purchased mostly on an as-needed basis. It is expected that the alumina market will show a weak and volatile trend in the later period.

Analysts believe that the caustic soda prices have been relatively weak recently, this week. Recently, domestic downstream sectors in China have mostly been purchasing according to demand. There is no positive support for the Shandong market next week, and demand has not seen substantial improvement. Orders from outside Shandong Province have basically concluded their quotations. The overall supply and demand dynamics suggest that caustic soda may continue to maintain a weak and range-bound operation trend later on, depending specifically on the demand from the downstream market.