Shouchuang Futures: Energy prices decline, domestic demand remains weak, and the spot price of caustic soda shifts downward.

In the spot market, the price of 32% ion-exchange membrane alkali in Shandong is 738 yuan/ton, up 1 yuan/ton from the previous trading day. With downstream buyers in the main supply chain continuing to raise procurement prices, spot deal prices generally follow only to a limited extent. High-concentration caustic soda alkali spot shipments are generally sluggish, and some spot prices are lowered.

On the supply side, Tianjin Lijin Bohai Chemical’s 290k tons of chlor-alkali equipment was shut down for a full inspection and maintenance on March 28, and the restart time is to be determined. Last week, domestic sample enterprises with 100k tons or more of caustic soda capacity reported an average utilization rate of 84.6%, up 0.7% month over month. Producers in Shandong are optimistic about the outlook, and some plants have proactively increased inventories. For domestic fixed-liquid caustic soda sample enterprises of 200k tons or more, plant yard inventories were 525.4k tons (wet tons), up 4.93% month over month and up 14.28% year over year. The weekly average gross profit of chlor-alkali enterprises in Shandong was 323 yuan/ton, with a clear improvement month over month. This week, chlor-alkali enterprises increased operating rates, and supply is expected to increase.

On the demand side, downstream alumina operating rates rose by 0.1 percentage points, and the capacity utilization rate of viscose staple fiber increased by 0.39 percentage points month over month. In the near term, the domestic alumina operating rate recovery remains relatively slow. New alumina projects are pending commissioning, and non-aluminum demand maintains a rigid need. Expectations for domestic liquid caustic soda exports are relatively positive, providing some support for demand for caustic soda.

Overall, with energy prices falling and domestic demand remaining weak, caustic soda futures prices continue to adjust downward. However, the geopolitical situation remains tense. Foreign chlor-alkali plants are keeping operating rates at low levels, which supports better export demand for caustic soda from China and may limit the downside space for caustic soda futures prices. Keep an eye on the geopolitical situation, changes in plants domestically and abroad, and the progress of commissioning new downstream capacity. (Chuangchuang Futures)