In the first half of 2022, the domestic flake Caustic Soda market performed well as a whole, and the price continued to rise. Both supply and demand brought certain benefits to the flake caustic soda market.
In the first half of the year, the domestic market price of caustic soda in flakes performed well on the whole, and the price continued to rise in part of the time, and the transaction atmosphere was hot. Take Wuhai area in Inner Mongolia as an example. From January to June, the average ex factory price of 99% of the local mainstream caustic soda market was 3824.8 yuan / ton, up 124.37% from 1704.7 yuan / ton in the first half of last year. Let's have a look at the specific stages.
From January to mid February, the overall market price of domestic flake caustic soda continued to rise. The main reasons are as follows: on the one hand, the pre-sale orders of Northwest flake soda enterprises continued to be good in January, there was no pressure on the factory to sign orders, the inventory was always low, there was basically no sales pressure, and the factory had an obvious mentality of raising prices; On the other hand, the downstream alumina orders are in good condition, especially the alumina plants in the southwest region are obviously short of caustic soda. A large number of Xinjiang flake caustic soda supplies flow to the southwest region, resulting in the continuous tight supply of Xinjiang flake caustic soda, insufficient periodic shipments to traders, and also a small number of flake caustic soda supplies at the trader level; In addition, Hebei Wenfeng alumina was prepared before production, and some flake caustic soda demand was increased, which also brought a certain positive boost to the flake caustic soda market; Other downstream terminal demand rigid demand replenishment and appropriate pre holiday stock also brought good support to the price of flake caustic soda; In addition, the price increase of flake caustic soda enterprises this round is relatively moderate, the acceptance ability of downstream and traders is relatively controllable, and the market mentality is acceptable; As a result, the ex factory price of flake caustic soda continued to rise.
From mid February to mid March, the domestic market price of flake caustic soda continued to fall after a stalemate with the short-term high. The main reason was that with the early price of flake caustic soda rising to a record high, the downstream resistance to high price flake caustic soda continued to grow, coupled with the poor performance of the market price of liquid caustic soda during this period, the signing situation of flake caustic soda factories was not ideal, the inventory pressure continued to increase, and the price of flake caustic soda continued to fall.
From mid to late March to late June, the price of caustic soda in domestic chip packaging has entered a sustained high for about three months, which is firm and continues to rise. The main reasons are: on the one hand, the logistics transportation efficiency between different regions is low from April to may, the delivery of large-scale caustic soda enterprises is not smooth in some time periods, and the delivery cycle is long, which leads to the continuous low social inventory and the phased poor supply chain transmission. In addition, some large-scale caustic soda enterprises arrange maintenance at this stage, which further boosts the supply; On the other hand, the price of liquid caustic soda in the eastern region continues to rise, and a certain acceptance will bring continuous positive boost to the price of caustic soda in flakes; In addition, the downstream alumina industry has strong support for the rigid demand for flake caustic soda. The bauxite grade of alumina enterprises is low, and the increase in the consumption of flake caustic soda is also one of the main factors that continue to bring a good boost; Moreover, in June, some large-scale flake caustic soda enterprises concentrated on continuous maintenance, which continued the positive supporting role of the flake caustic soda supply side. In addition, the pre-sale order volume of flake caustic soda enterprises in various regions continued to be good, and the upward adjustment mentality continued to exist.
Judging from the current market situation, with the long-term rise in the price of flake caustic soda, the enthusiasm of the downstream for receiving high priced flake caustic soda has decreased, the increase in the price of flake caustic soda has been significantly narrowed, and some traders have arbitrage shipments, so the mentality of market increase is relatively general. And with the end of this round of maintenance period in late June and early July, the supply of flake caustic soda will gradually recover, and the overall bearish mentality of the market will be further amplified.
However, from the current pre-sale orders of flake caustic soda enterprises to the social inventory of flake caustic soda, flake caustic soda enterprises still have some pre-sale to be delivered, and the social inventory of flake caustic soda is still not high, which will bring some support to the short-term price of the flake caustic soda market. The ex factory price of the short-term flake caustic soda factory is expected to be adjusted at a high level, and there is little possibility of a sharp reduction, and the market price of flake caustic soda may fall slightly. In the long run, with the current pre-sale orders of flake caustic soda being delivered one after another, the superposition and maintenance period all ending, and the overall profitability of downstream industries is poor, the domestic market price of flake caustic soda is likely to continue to fall significantly.
