CITIC Construction Investment Futures: Expectation of Reduced Supply in Co-Production of Caustic Soda

Shandong region 32% ion-exchange membrane caustic soda mainstream transaction price is 660-745 yuan/ton, stable compared to the previous trading day’s average price. A large local alumina plant’s liquid caustic soda procurement price is 590 yuan/ton. The mainstream transaction price for 50% ion-exchange membrane caustic soda in Shandong is 1260-1300 yuan/ton, up 15 yuan/ton from the previous trading day’s average price. Downstream procurement is acceptable, and recently some chlor-alkali companies’ production has been unstable, providing some support for prices. The price of 32% liquid caustic soda remains stable, and the market transaction for 50% liquid caustic soda is decent. Boosted by export markets, prices are stable with slight increases. In the short term, the drivers include concerns over supply disruptions of ethylene-based PVC raw materials in Japan, South Korea, and other countries caused by regional conflicts spilling over in the Middle East. Some petrochemical giants have expectations of reduced PVC inventory burdens, which in turn leads to expectations of decreased operating rates for caustic soda as a co-product. Chinese overseas order inquiries are increasing. Additionally, since nearly 30% of ethylene-based plants in China are currently operating, some facilities are also experiencing raw material shortages, leading to expectations of reduced supply of co-produced caustic soda. (CITIC Construction Investment Futures)