In October, the domestic caustic soda market showed a stable and positive trend. The market which had been silent for 9 months finally saw hope. The market price of liquid alkali and tablet alkali both rose continuously, and the insiders operated actively.However into November, caustic soda market decline gradually show, as the early maintenance enterprise resume to start, winter heating season and the arrival of the demand season, the situation of the market oversupply has begun to show.

Caustic soda market after the trend of the main factors

1, less maintenance enterprises, operation rate gradually increased, supply increased.With the early maintenance of chlor-alkali enterprise units have been resumed, the current operating rate has exceeded 80 percent in about 81%, the market supply of goods gradually increased;In terms of caustic soda, the current plant operation of the manufacturer is stable. With the end of the pre-sale orders, the inventory of the manufacturer also begins to be gradually sufficient.

2. Liquid chlorine market has strong momentum.Supported by downstream profits, liquid chlorine market trend is strong, although the recent price has also seen dramatic ups and downs, but compared with the same period is still high, and the November start of nearly six years of high prices.Under this support, chlor-alkali enterprises to reduce the possibility of negative production.

3, the northern winter heating season, coupled with the cost of alumina has risen, alumina industry will be limited to start.According to data from Changjiang Non-ferrous Metals Network, the weighted average of full cost including tax in China’s alumina industry was 2281.64 yuan/ton in October 2020, up 12.77 yuan/ton from 2268.87 yuan/ton in September 2020, up 0.56% month-on-month and down 8.86% year-on-year.Coupled with the impact of low overseas supply, do not exclude the enterprise to take the “negative insurance price reduction” measures.

4, printing and dyeing textile industry export orders decreased.Due to the second outbreak of the epidemic abroad, the foreign trade orders of the textile industry dropped sharply, and the domestic trade gradually returned to normal. The market once again fell into trouble.

To sum up, the current caustic soda enterprise equipment negative possibility is small, the output will also increase;And although the overall operation rate of alumina this year is not high, the heating season limited production impact is not big, but in the overall market is weak and the impact of low overseas supply, do not rule out enterprises to reduce production measures.In the short term, caustic soda market in the supply side and demand side support is limited, the situation of oversupply will gradually appear, it is expected that the recent market more weak operation.
Brief analysis of the recent domestic caustic soda market

I. Liquid and alkali market

This week, the domestic liquid alkali market basically maintains stable operation, the price fluctuation is not big.In the western part of Shandong province, the early maintenance device resumed operation and the supply of goods increased, leading to two consecutive days of price decline in West Shandong, the range of 30 yuan/ton. With the continuous resumption of construction of local maintenance enterprises in Shandong, the pressure of later shipment will increase;In Jiangsu province, some enterprises in the early stage of maintenance supply, coupled with the recovery of printing and dyeing industry demand increased, some enterprises prices rose;At present, there are still some manufacturers in Inner Mongolia with low inventory, which plays a certain supporting role. The price will increase by 100-150 yuan/ton (discount of 100 yuan).Other regions remained largely stable.

On the whole, with the early maintenance of enterprises to resume work, the market supply of goods will gradually increase, in the downstream demand did not see a significant improvement in the amount of circumstances, the enterprise shipping pressure will increase, the market supply and demand contradiction will gradually appear.

As of November 11, the reference prices of liquid and alkali in the domestic mainstream market are as follows:

In view of the current market situation, the inventory of enterprises is gradually increasing, the pressure of shipment is further increased, the overall market is in a weak position.In view of this, it is expected that in the short term the domestic liquid alkali market is still more weak operation, do not rule out the possibility of individual enterprise price reduction.
Second, the alkaloid market

This week, the domestic alkaloid market is mainly down, the price of main producer is reduced by 50-100 yuan/ton.At present, the mainstream price in Inner Mongolia is 1650-1700 yuan, but the actual transaction price is 50 yuan/ton lower.

Since November, with the end of pre-sale, the manufacturer’s inventory is gradually increasing, the downstream alumina with the arrival of winter heating peak production, and the alumina market is currently in a weak trend, also has a certain negative impact on the flake caustic soda market.To this end, a piece of alkali factory to reduce the price to stimulate shipment.At the same time, it should also be noted that the single alkali order signed by alumina has been finalized. From the perspective of the number of orders signed, there is little difference from the usual, and the support for the flake alkali market is limited.The current alkali price is relatively low, will to some extent to stimulate the enthusiasm of traders to take goods.If the two add up, the support for the market will be slightly strengthened.
As of November 11, the reference prices in the domestic mainstream alkaloid market are as follows:

Current downstream demand has some support, but for the overall market support is still limited, if traders operate actively, the price of the main manufacturer is more likely to remain stable, but still do not rule out the possibility of price reduction of other manufacturers.In view of this, it is expected that in the short term the domestic alkaloid market is still more weak operation.