This week, caustic soda prices were weak (2.2-2.6)

February 6th, news:

I. Price Trends

According to the commodity analysis system, the caustic soda prices showed a weak trend this week. The average market price at the beginning of the week was 628 CNY/ton, and by the end of the week, it had dropped to 622 CNY/ton, a decrease of 0.96%, and a year-on-year decrease of 38.72% compared to last year. On February 5th, the chemical index stood at 797 points, down 2 points from the previous day, a decrease of 43.07% from the highest point in the cycle at 1400 points (on October 23, 2021), and an increase of 33.28% from the lowest point on April 8, 2020, which was 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 in China were weak this week. In Shandong, the mainstream market price for 32% ion-exchange membrane caustic soda was around 550-650 CNY/ton. In Zhejiang, the caustic soda prices remained stable, with the mainstream market price for 32% ion-exchange membrane caustic soda around 850-970 CNY/ton. In Inner Mongolia, the caustic soda prices were stable, with the mainstream market price for 32% ion-exchange membrane caustic soda (converted to 100%) around 2200-2300 CNY/ton. The supply of caustic soda in China remained loose this week, and the inventory clearance by enterprises was not significant. The overall load of liquid caustic soda in Shandong remained high, and the profit margin in the chlor-alkali industry was not high, providing support at the cost end. The recent market entry enthusiasm for downstream alumina was average. In the north, due to weather conditions and the gradual decrease in stockpiling for the Spring Festival, the market was still in a stalemate, with most purchases of caustic soda made on a need basis. It is expected that the alumina market will show a weak fluctuation trend in the later period.

Analysts believe that the caustic soda prices have been weak recently this week. Recently, domestic downstream sectors in China have mostly been purchasing according to their needs, and the Shandong market has not received any favorable support, with no substantial improvement in demand. Orders from outside Shandong Province have basically concluded, and now the focus is on executing long-term orders. The overall supply and demand dynamics suggest that caustic soda may continue to maintain a weak and range-bound market trend later on, depending on the specific downstream market demand.