Export expectations increase, caustic soda futures maintain a relatively strong trend.

On the supply side, South Korea and Indonesia’s chlor-alkali operations have decreased, leading to a reduction of nearly 300,000 tons of caustic soda supply. Domestically, recent prices of liquid chlorine and caustic soda in Shandong have risen, restoring the overall profit margin of the chlor-alkali industry and boosting production capacity utilization. In March, a scheduled maintenance plan for domestic chlor-alkali plants will reduce effective industry supply, increasing market expectations for destocking of caustic soda. On the demand side, mineral prices for alumina raw materials were weak in March, but the industry’s loss situation may improve. It is expected that alumina production will slightly increase in March, with new capacities coming online from March to June. Additionally, after the holiday, downstream non-aluminum industries are gradually resuming work, marginally improving liquid alkali demand. Recently, the futures market has performed strongly, significantly improving spot trading sentiment, with some terminal buyers showing increased purchasing enthusiasm.

Viewpoint: Overseas chlor-alkali plants reducing production will decrease caustic soda supply, potentially boosting China’s caustic soda exports. New domestic alumina capacities coming online will benefit domestic demand. In the short term, caustic soda futures prices are expected to remain relatively strong, with attention on overseas plant changes and the progress of new downstream capacity launches. (First Innovation Research)