Shouchuang Futures: The high alkalinity has weakened, and caustic soda futures prices continue to decline.

On the supply side, as chlor-alkali profits recover, recent maintenance at chlor-alkali plants has been limited, and operating rates have increased. Last week, the average utilization rate of domestic sample enterprises producing 100k tons or more of caustic soda was 85.7%, up 1.1% week-on-week. The nationwide inventory at fixed liquid caustic soda plants producing 200k tons or more was 530.3k tons (wet basis), up 0.94% week-on-week and up 8.44% year-on-year. Enterprises in Shandong with no export orders are experiencing poor sales, leading to rising inventories. It is expected that the utilization rate of caustic soda capacity will remain at a relatively high level this week, with ample supply.

In terms of demand, after signing orders for highly alkaline products in April, there have been no new export orders in May. Due to rapid price increases earlier, domestic demand for highly alkaline products has been weak, and prices have retreated. After major downstream buyers increased their purchase prices, delivery volumes have gradually risen, but the increase still falls short of expectations. The new production capacity of aluminum oxide in Guangxi is expected to start gradually releasing output in mid to late April, but recent maintenance plans at some aluminum oxide plants in the southwest may impact caustic soda demand. Non-aluminum demand has weakened somewhat.

Viewpoint: The domestic demand for caustic soda is marginally weakening, while supply remains high, leading to continued inventory accumulation. In the short term, caustic soda futures are expected to fluctuate weakly, with attention to geopolitical situations, domestic and international plant changes, and downstream delivery volumes. (First Capital Futures)