Chlor-alkali plant reduces load, caustic soda futures continue to stay strong

In terms of supply, overseas chlor-alkali units reduce operating rates, and caustic soda supply declines, which may drive an increase in China’s caustic soda exports. Domestically, Tianjin’s chlor-alkali enterprises reduce operating rates and cut production, and export expectations will further generate additional upside. In March, the industry’s centralized maintenance and shutdown plans for chlor-alkali units will be implemented, and effective industry supply will be reduced, strengthening market expectations for caustic soda stockpiling reduction. On the demand side, in the near term, the ore-price trend at the upstream end of alumina is relatively weak; the industry’s loss-making situation may improve. Alumina operating rates are expected to rise slightly, and new alumina capacity in the 3–6 month period will be commissioned successively. In addition, after the holiday, non-aluminum downstream sectors will gradually resume operations, leading to a marginal improvement in demand for liquid caustic soda. Overseas, chlor-alkali units cut output, and demand for exports of high-concentration alkali increases. Viewpoint: With more maintenance and shutdowns for both domestic and overseas units, the expectation of tighter supply will be further reinforced. Combined with the demand increase brought by new downstream capacity, and with export growth expectations as well, it is expected that in the short term caustic soda futures prices will maintain a strong trend. Pay attention to changes in overseas units and the commissioning progress of new downstream capacity. (CICC Research)