Caustic soda rises at high risk

After the National Day, the prices of caustic soda in Henan, Hebei, Shandong and other regions quickly rose, radiating overall market turnover in other regions of the country. The mainstream price in the northern region rose from 1600 yuan (32% ion-exchange membrane or 100 tons, the same below) before the holiday to about 1900 yuan after the holiday, an increase of 18%, and the increase in East China and South China exceeded 10%. This year has seen a strong upward trend based on the maintenance of high levels. However, with the rise of caustic soda and gamma, the law of chlorine and alkali has been broken in the past, and the market adjustment pressure has also increased. Therefore, the market outlook should be alert to the risk of adjustment during the alternating hot and cold periods.

——The shortage of raw materials has driven the market to continue to take the lead. The country has been driven by energy conservation and emission reduction. The phenomenon of limiting the production of electricity in all regions has not been able to completely improve in the short term. The continuous production restriction of calcium carbide enterprises led to a rise in the market, and the tight supply of goods, coupled with the price increase of the original salt, the cost of chlor-alkali enterprises continued to increase due to this, and the start-up could not reach the normal level. In order to balance production costs and downstream sales markets, chlor-alkali enterprises in various regions have experienced rapid price increases, especially in Henan, Shandong, and other regions. This is the first time in a short period of time that this year has seen a rapid pull-up.

——Increase in demand, driving prices to rise sharply It is understood that the recent domestic non-ferrous metals market continues to take a good turn, electrolytic aluminum is a continuous increase in prices, driving the substantial increase in alumina demand, domestic alumina companies have increased the existing operating rate to varying degrees . And in October, it was also the centralized purchasing period of the alumina companies in the fourth quarter. As a result, the demand for caustic soda in the alumina enterprises suddenly increased sharply, and the demand for caustic soda in other paper, chemical fiber, and chemical industries could not be met. Affected by this comprehensive interest, there was a step-up increase in prices after the caustic soda festival, and radiation from the caustic soda production areas such as Henan and Shandong quickly radiated to the surrounding areas.

- Partial shortage of goods, speculation to promote the overall atmosphere One of the reasons for the rapid rise of the market is the lack of supply in some areas. Some small and medium-sized chlor-alkali enterprises in Henan Province have been unable to maintain normal production for a long period of time, and some companies have still stopped production so far, and some large-scale production enterprises such as Henan Shenma have also experienced a phenomenon that the operating rate is less than 50%. The instability of the supply caused the market. The quick pull up. It is also understood that due to shortage of supply in Henan, traders’ market speculation has also played a role in boosting the situation, and some small downstream demand companies have even appeared to rob the goods.

——Good Exports and Enhancing the Company's Increased Confidence Exports of caustic soda have gradually improved in the eastern China and other regions. Export orders have increased, and some lower-priced regions in the western region have also followed up. For example, the Inner Mongolia region has risen from 900 yuan to more than 1,100 yuan. 22%, Xinjiang also rose more than 10%, laid the foundation for the overall market to be good.

However, it is worth noting that the recent increase in the price of caustic soda, in addition to raw material shortages and limited start-up, is still mainly affected by the concentration of downstream purchase orders. The centralized purchasing of alumina companies caused some chlor-alkali enterprises to temporarily increase their inventory to cope with the possible concentrated supply, and the external shipments were limited. The purchases of chemical fiber, chemicals, and papermaking enterprises could not be satisfied, resulting in rapid price increase. . However, once alumina companies and other large purchase plans have been finalized, and supply has entered a stable period, short-term hot spots will surely be cooled. Market supply will not rule out instantaneous heavy-lift shipments, and the risk of adjustment will increase accordingly. .

At the same time, the chlor-alkali enterprises' operating rate has been further improved significantly by the encouragement of both chlorine and alkali heating up prices. And the low-cost sources in the west have begun to flow into the Mainland, and the tight supply situation will soon be eased, forming a hot and cold market. According to the trend of chlorine and alkali prices, if the market is still able to maintain the current high level, the caustic soda market will face increased pressure to adjust, we should be alert to adjust the market outlook risk.

In addition, the side effects of short-term speculation in the market cannot be ignored. As the speculation in the market cools down, caustic soda prices will rise to new trading platforms, and adjustments will follow. It is recommended that companies pay attention to recent macroeconomic policies, look at far market trends, avoid adverse impacts caused by short-term ups and downs, maintain a good attitude, integrate domestic enterprises in various regions, analyze upstream and downstream market information, and timely change business strategies to cope with adjustment risks; A good opportunity to increase exports and stabilize the domestic market.