The Price of Caustic Soda Hits A 5-month High, Can It Go Up Again?

Since April, the market price of caustic soda in Shandong has continued to rise. As of April 20, 50% ionic membrane alkali rose from 1600 CNY/ton to 1950 CNY/ton, an increase of 21.9%; 32% ionic membrane alkali rose from 980 CNY/ton To 1250 CNY/ton, an increase of 27.6%, breaking through the previous sideways area in one fell swoop, to the highest point in more than five months.

Affected by this, the ex-factory price of high alkali of Sinopec Qilu Branch increased six times, from 1580 CNY/ton to 1950 CNY/ton, a cumulative increase of 370 CNY/ton, an increase of 23.4%, compared with the previous stage on March 3 The sex low of 1370 CNY/ton rose 580 CNY/ton, an increase of 42.3%.

There are three reasons for the surge

Several sets of equipment were shut down for maintenance, and the market supply continued to be tight.

On the basis that Zhonggu Mining, Dongying Jinmao, Jiangsu Xinpu Chemical, Shandong Huatai, Shandong Jinling, and Shenyang Chemical continued to stop or overhaul, in early April, Jiangsu Haixing, Leshan Fuhua, and Shandong Dongyue stopped one after another and entered the state of maintenance. , the total lost production capacity was 2.31 million tons, accounting for 5.1% of the total domestic caustic soda production capacity (45.07 million tons). The recent overhaul of domestic caustic soda plants is shown in Table 1.

Affected by the large number of maintenance devices and the decrease in supply, the inventory of chlor-alkali enterprises has dropped significantly, which is the main reason for the recent sharp rise in the price of caustic soda.

Downstream construction increased, demand continued to improve

After the Spring Festival, the Beijing Winter Olympics, the Winter Paralympics and the National Two Sessions were held one after another. Affected by environmental protection policies, the start-up of chemical companies in Shandong and North China has been greatly reduced. With the conclusion of the Winter Olympics and the Two Sessions, the environmental protection restrictions have been gradually lifted, the chlor-alkali downstream enterprises have resumed operations rapidly, and the demand for caustic soda has continued to improve.

Repeated epidemics in many places restrict logistics and transportation

Since mid-March, the epidemic situation in Shandong, Jiangsu, Shanghai and other places has worsened, people have been quarantined at home, and transportation has been restricted. Most chlor-alkali enterprises have declined in operation and inventory has declined, and some enterprises have closed down, aggravating the tight market supply. At the same time, the raw material inventory of downstream alumina enterprises in many places in China is insufficient, and the purchase price of caustic soda has been continuously raised.

Insufficient momentum to continue to rise

Some maintenance units resume production one after another, and supply continues to increase

As can be seen from Table 1, among the recent maintenance facilities, Leshan Fuhua, Shenyang Chemical, Shandong Jinling have resumed production, Shandong Dongyue is about to restart, and supply continues to increase. With the easing of the epidemic, some early-stage parking or load-reducing devices will be resumed one after another, and the tight supply situation will gradually ease.

The main downstream construction is stable, and demand continues to improve

At present, the main downstream alumina of caustic soda is profitable, and the construction is active. In addition, the new alumina plant in Wenfeng, Hebei Tangshan has been put into operation, and the demand has maintained a growth trend.

The epidemic is expected to be brought under control, and logistics and transportation will resume

The epidemic situation in Shandong has been effectively controlled, transportation has gradually recovered, highways have resumed traffic in the province, and the main downstream goods receiving situation has improved significantly. Affected by the epidemic in Shanghai, East China is still in a state of control. In the later period, with the intensification of local aid to Shanghai, the epidemic will gradually ease, logistics recovery is just around the corner, and the mismatch between supply and demand will gradually ease.

On the whole, although the downstream demand continues to improve, the market supply increases. At the same time, with the easing of the epidemic, the recovery of logistics, and the improvement of downstream receipts, the caustic soda market will continue to have insufficient upward momentum, and will show a trend of rising and then falling in the later period.