1. Caustic Soda: basic chemical industry, widely used
1.1. Classification: liquid alkali and solid alkali
Caustic soda, namely sodium hydroxide, is strongly alkaline, corrosive and hygroscopic. The chemical formula of caustic soda is NaOH, which is also called caustic soda and caustic soda. The chemical characteristics of caustic soda are strong alkalinity, strong corrosivity and strong hygroscopicity. In terms of corrosivity, caustic soda has corrosive effect on skin, fiber, glass, ceramics, etc; In terms of hygroscopicity, caustic soda is easily soluble in water. When it is dissolved, a large amount of heat is released to form an alkaline solution. At the same time, it is also easy to react with water vapor and carbon dioxide in the air, deliquesce and deteriorate. In addition, caustic soda is moderately toxic, and the combustion decomposition products may produce toxic and harmful gases. According to different appearance, caustic soda can be divided into liquid caustic soda and solid caustic soda. Liquid caustic soda is abbreviated as liquid alkali, that is, sodium hydroxide solution, which is a colorless and transparent liquid. According to the mass fraction of sodium hydroxide, it can be divided into 30% liquid alkali, 32% liquid alkali, 42% liquid alkali, 45% liquid alkali, 50% liquid alkali, etc. depending on the use of production process, the general concentration of current market production is 30-32% or 40-42%.
Solid caustic soda is abbreviated as solid caustic soda, and its main appearance is flake. Solid alkali is colorless and transparent crystal. According to the mass fraction of sodium hydroxide, it can be divided into 73% solid alkali, 95% solid alkali, 96% solid alkali, 99% solid alkali, 99.5% solid alkali and other series products. The alkali content is higher than that of liquid alkali. From the appearance, solid alkali can be divided into flake alkali and granular alkali. China's solid alkali market is dominated by flake alkali, which is mainly due to its simple production process, low production cost, many use scenarios and large market demand. Compared with flake caustic soda, granulated caustic soda is more complex, technically difficult and relatively expensive. In addition, there is a kind of barreled solid caustic soda in the market, which needs to break the barrel when used, which is more laborious, and the packaging cost is high, so it has been gradually replaced by flake caustic soda.
Except for different forms, the downstream application fields of liquid alkali and solid alkali are similar. Liquid caustic soda and flake caustic soda are the same substance in nature, and only their appearance and sodium hydroxide concentration are different. Compared with flake caustic soda, liquid caustic soda has lower concentration and price. In the production process, flake caustic soda can be obtained by subsequent processing of liquid caustic soda. At present, caustic soda production enterprises mostly ship in the form of liquid caustic soda. Therefore, in the industry research, we focus on the market situation of liquid caustic soda. Liquid caustic soda generally refers to ionic membrane liquid caustic soda with a mass concentration of 32%, and flake caustic soda generally refers to solid caustic soda with a mass concentration of 96%.
1.2. Industrial chain: the upstream is raw salt, and the downstream is widely used
Caustic soda is the core product of chlor alkali industry, and there are many by-products in the production process. The main direct product of chlor alkali industry is caustic soda, and the rest are by-products produced in the production process, including chlorine and hydrogen, which are produced simultaneously in a certain proportion. There are many derivatives of chlor alkali industry, including high-purity hydrochloric ACID, industrial hydrochloric acid, polyvinyl chloride (PVC), sodium hypochlorite, etc. the correlation between products is large. There are more than 1300 downstream products, which have a very high economic extension value. Chlor alkali industry has a long history of development. Chlor alkali industry refers to the industrial production of chlorine (Cl2), hydrogen (H2) and caustic soda (NaOH) by electrolysis of saturated salt water (NaCl solution), and the production of a series of chemical products with them as raw materials. The chlor alkali industry first appeared in the 18th century. Initially, chlorine was produced by heating manganese dioxide and hydrochloric acid together, and caustic soda was produced by the reaction of limestone and soda ash. Until the end of the 19th century, with the emergence of diaphragm method, electrolysis technology and the rapid development of industrialization, the chlor alkali industry gradually flourished.
Caustic soda is located in the middle reaches of the chlor alkali industrial chain. Its upstream is mainly raw salt, and its downstream is widely used. Raw materials in the upstream of caustic soda industrial chain are raw salt. In addition, hydropower resources are also required in the production process. According to the data of Baichuan Yingfu, 1.4-1.6 tons of raw salt, 6 tons of water and 2200-2600 kilowatt hours of electricity are required for each ton of caustic soda production. At the same time, each ton of caustic soda produced will produce about 0.88 tons of liquid chlorine. There are many downstream applications of caustic soda, mainly including alumina, chemical industry, papermaking, printing and dyeing, petroleum, light industry, etc.
Raw salt is the main raw material in the upstream of caustic soda industry. China is rich in salt resources and is one of the largest raw salt producers and consumers in the world. They are mainly divided into three types: sea salt, well mineral salt and lake salt, which account for 59%, 39% and 2% of China's production capacity respectively, and the output of sea salt and well mineral salt accounts for 34% and 66% respectively. The product sales of raw salt mainly depend on two alkali industries, namely caustic soda and soda ash. In 2021, in the annual consumption structure of raw salt, the consumption of caustic soda industry accounted for 56.25%, accounting for more than half, the consumption of soda ash accounted for 37.02% and the consumption of others accounted for 6.73%.
Salt resources are widely distributed in China, but the distribution is extremely uneven. Salt mines in China are mainly distributed in the southwest, Central South and northwest regions, and concentrated in five provinces: Xinjiang, Qinghai, Sichuan, Yunnan and Hubei. According to the classification of salt mines, mine salt is mainly distributed in Yunnan, Sichuan, Hubei, Shandong, Jiangxi, Jiangsu, Xinjiang, Gansu, Qinghai and other places; The main production areas of sea salt include Shandong, Liaoning, Jiangsu, Zhejiang, Guangdong and other places. Among them, Shandong and Liaodong Bay salt areas have flat coastal terrain and are important sea salt producing areas in China. Considering the convenient transportation, China's caustic soda production enterprises are also concentrated in South China, North China and Northwest China.
Caustic soda is widely used in downstream industries. There are many downstream consumption fields of caustic soda, mainly including aluminum oxide, light industry, printing and dyeing, chemical industry, viscose staple fiber, papermaking, petroleum, etc. among them, aluminum oxide accounts for the largest proportion, followed by chemical industry and light industry. In the chemical industry and light industry, the application of caustic soda is not limited to specific products, but is widely used in the whole industry, including Detergent, soap, glass, organic chemical industry, inorganic chemical industry, chemicals and other products.
1.3. Process: mature ion-exchange membrane technology
1.3.1. Caustic soda process transition route
China's caustic soda industry began in 1929 and has a history of nearly 100 years. In 1929, China established the first caustic soda plant - Shanghai Tianyuan electrochemical plant, which was put into operation, opening a chapter in the development of China's caustic soda industry. The number of caustic soda production enterprises has grown from 9 before liberation to 158 today, and the caustic soda production units have contributed a lot. With the continuous development of China's caustic soda industry, both production technology and production equipment are becoming more and more advanced. In the history of caustic soda production, two major methods have been used, namely causticization and electrolysis. Caustic soda is produced by caustic soda aqueous solution and quicklime through caustic reaction, which is then replaced by electrolysis. Electrolysis method is to produce caustic soda through direct current electrolysis of salt water, and produce by-products chlorine and hydrogen at the same time. According to the different materials of the separation membrane used in the electrolysis process, the electrolysis method can be divided into two categories, namely, diaphragm electrolysis method and ion-exchange membrane electrolysis method. At present, ionic membrane electrolysis is widely used in caustic soda industry.
1.3.2. Traditional process: causticization and diaphragm process
Caustic soda is a traditional production process, which was mainly used before 2000. Caustic soda produced by causticization takes natural alkali as raw material and mainly relies on natural alkali mineral resources. The production cost is low and the economic benefit is high. Before 2000, causticization was widely used in China, and the processing technology was mature. Around 2000, due to the limited alkali mineral resources and the small output of causticization process in China, the national policy restricted it, and Chinese enterprises completely eliminated the production process. Caustic soda production from natural caustic soda mainly goes through four steps: causticization, evaporation, salting out and solid alkali packaging. In the causticization stage, 12%na2co3 soda solution shall be prepared in the causticization tank, quicklime shall be added, the causticization temperature shall be controlled at 95-105 ℃, continuous stirring shall be carried out to causticize, and then the clear brine shall be obtained through filtration. In the evaporation stage, the qualified brine cleaning solution is prepared for medium concentration evaporation and high concentration evaporation in turn to remove the impurities of sodium sulfate, sodium carbonate and sodium chloride and obtain high concentration sodium hydroxide. In the salting out stage, the high concentration liquid is further precipitated into crystals, filtered, and sent to the cold analysis barrel. After reaching the standard, the product is precipitated in the intermittent sedimentation tank. The last step is to pack the obtained flake alkali.
In a period of time after caustic soda was eliminated, membrane electrolysis was used to replace caustic soda in China. Diaphragm electrolysis is a method to obtain caustic soda by using porous permeable asbestos diaphragm as the interlayer, graphite as the anode and iron as the cathode to separate the chlorine produced by the anode from the sodium hydroxide and hydrogen produced by the cathode.
The main processes of diaphragm electrolysis method include brine refining, brine electrolysis, electrolyte evaporation, chlorine treatment, hydrogen treatment and waste gas absorption. The quality requirements of refined brine are low, and only one refining is required. Add refined brine into the electrolytic cell, flow from the anode chamber to the cathode chamber, and obtain chlorine in the anode chamber and electrolyte and hydrogen in the cathode chamber. In the diaphragm electrolyte, the content of sodium hydroxide is only 10.8%, and the content of sodium chloride is as high as 16.4%. Therefore, the complex four effect countercurrent evaporation technology is used in the diaphragm method to evaporate the electrolyte, which has high energy consumption and difficult operation. During evaporation, about 10% of solid crystalline salt will be produced, which will cause serious wear and corrosion to the heating chamber. The average service life of the heating chamber is only about 3 years, which greatly increases the cost of diaphragm caustic soda. When chlorine is treated, it needs to go through four processes: chlorine washing, cooling, demisting, drying and compression. When hydrogen is treated, it needs to go through four processes: hydrogen washing, compression, deoxidation and drying.
The diaphragm electrolysis method has been replaced because of its low production intensity, low product purity and high environmental pollution. The domestic diaphragm method uses small cells as electrolytic cells. The production scale of 100000 tons / year requires 168 to 200 electrolytic cells to be installed, which covers a large area, is not conducive to centralized management, and the power consumption of the system is large. At the same time, because China adopts fixed box metal anode diaphragm electrolyzer and ordinary asbestos diaphragm, the operating current density is low and the DC power consumption is high. During the treatment of wastes and waste liquid, the waste liquid washed by the diaphragm method when replacing the diaphragm can only be discharged into the nearby waters after treatment; The discharged alkaline wastewater, chlorine containing wastewater and the feed liquid in the electrolytic cell shall be treated and recycled; The waste residue of salt mud can be treated and utilized. However, for the above wastes, most of the production enterprises in China directly discharge the waste gas without treatment. Therefore, the diaphragm method has serious environmental pollution and low resource utilization.
1.3.3. Mainstream process: ion-exchange membrane process
At present, the ion exchange membrane electrolysis caustic soda process is mature and is the mainstream production method. Ion exchange membrane electrolysis is a way to obtain caustic soda and chlorine by separating the anode chamber and cathode chamber of the electrolytic cell with perfluorinated sulfonic acid cation exchange membrane with stable chemical properties. The concentration of sodium hydroxide in the electrolyte obtained by electrolysis of brine is high, and it can be sold directly as liquid alkali. The process flow of ion-exchange membrane method is similar to that of membrane method. The process also includes brine refining, brine electrolysis, electrolyte evaporation, chlorine treatment, hydrogen treatment and waste gas absorption. Different from the diaphragm method, the ion-exchange membrane electrolysis method has higher requirements for brine and needs secondary refining. During brine electrolysis, refined brine is added to the anode of the electrolytic cell and high-purity water is added to the cathode. After electrolysis, light brine and chlorine are obtained in the anode chamber, and electrolyte and hydrogen are obtained in the cathode chamber. The concentration of sodium hydroxide obtained in this step is high, generally up to 32%, while the content of sodium chloride is only 0.004%. In the electrolyte evaporation process, the ionic membrane process is simpler, and only three effect or two effect evaporation is required.
Ion-exchange membrane electrolysis is the development direction of caustic soda production by electrolysis, with obvious advantages. Compared with diaphragm caustic soda, ionic membrane caustic soda has less investment and less environmental pollution. The production cost of finished alkali mainly includes the cost of materials and power. In the diaphragm method, the materials used mainly include raw salt, calcium chloride, sodium carbonate, etc; Power mainly includes electricity and steam. In the ionic membrane method, calcium chloride is replaced by barium chloride as the raw material. In 2009, the diaphragm method prevailed and the ionic membrane method gradually rose. At that time, the cost of the ionic membrane method was better than that of the diaphragm method. The cost of the diaphragm method was 1456 yuan / ton of sodium hydroxide, and the unit cost of the ionic membrane method was 1245 yuan / ton of sodium hydroxide, about 15% lower than that of the diaphragm method.
In terms of product quality, the impurity content of caustic soda produced by ion-exchange membrane method is lower. According to qiaoyuyuan's article "comparative analysis of caustic soda production process by diaphragm method and ion-exchange membrane method", after more evaporation treatment, the proportion of sodium hydroxide in the finished product of diaphragm method can be increased to more than 48%, meeting the production requirements, but there are still a lot of sodium chloride impurities in the product, up to 1.5%. In contrast, the ion-exchange membrane evaporation process is simple, with a high content of sodium hydroxide and a significant reduction in the content of sodium chloride impurities, only 0.007%, which is suitable for industries requiring high impurities, such as viscose fibers.
In terms of energy consumption, the unit energy consumption of ion-exchange membrane method is lower than that of membrane method. Due to the special structure of ion-exchange membrane, ion-exchange membrane electrolyzer has stronger selectivity and can obtain high-purity electrolyte. Not only the DC power consumption is reduced, but also the steam consumption in the evaporation process of electrolyte is greatly reduced. Although the diaphragm electrolysis method greatly optimizes the DC power consumption of the electrolytic cell by optimizing the diaphragm formula, improving the adsorption capacity and recoating the old anode, the power consumption is still higher than that of the ion-exchange membrane method. According to qiaoyuyuan's article "comparative analysis of caustic soda production process by diaphragm method and ion-exchange membrane method", in 2009, the diaphragm method required 2427kwh DC power per ton of sodium hydroxide, and the comprehensive energy consumption was 878kg standard oil; The DC power consumption of ion-exchange membrane method is 2266kwh, and the comprehensive energy consumption is 723kg standard oil, which is about 21% lower than that of diaphragm method.
The domestic ion-exchange membrane has been successfully developed, and China's chlor alkali industry has the independent ability. Ion exchange membrane is the core of ion-exchange membrane electrolysis. For a long time, the production technology has been monopolized by the United States and Japan, but the development in China has not been successful for a long time. The high price of imported ion-exchange membrane and the fast replacement frequency of membrane in chlor alkali plant make it difficult for China's chlor alkali industry to develop for a long time. In 2004, the national development and Reform Commission issued a document to phase out the backward diaphragm process chlor alkali industry, providing a basis for the development of China's chlor alkali industry. Until 2009, the perfluorinated ion-exchange membrane of Dongyue Group was successfully developed and tested, and China became the third country with the manufacturing technology of perfluorinated sulfonic acid chlor alkali ion-exchange membrane. The key performance indexes of the latest generation of ion-exchange membrane DF2807 have successfully caught up with foreign countries, and the application effect is good. In the process of caustic soda production, the cell voltage is the key index to test the performance of ion-exchange membrane. The lower the cell voltage, the better the performance. According to zongshaojie's article "Application of Dongyue ionic membrane DF2807", compared with similar foreign products, the average voltage of DF2807 is relatively reduced by 30mV. After one year of operation, the voltage of DF2807 tank increased by 40mv year-on-year, while that of similar foreign products increased by 80mv year-on-year.
1.3.4. Development trend: upgrading of ion-exchange membrane electrolysis technology
In recent years, ion-exchange membrane electrolyzer has been upgraded continuously, and the new zero pole distance sub membrane electrolyzer has been widely used in caustic soda production. Compared with the common ion-exchange membrane electrolyzer, the zero pole distance sub membrane electrolyzer has more obvious effect of energy saving and emission reduction. The specific reason is that the smaller the distance between anode and cathode of the electrolysis unit, the lower the cell voltage and the lower the production power consumption. The electrode distance of ordinary electrolyzer is 1.8 to 2.2mm. The zero electrode distance electrolyzer makes the cathode net stick to the anode net by improving the cathode structure and adding an elastic net pad. The electrode distance is the thickness of the ionic film. Compared with ordinary ion-exchange membrane electrolyzer, the voltage of zero electrode distance electrolyzer is reduced by about 180mv under the same conditions, and the power consumption per ton of caustic soda is reduced by about 252kwh. In addition to the zero electrode distance electrolyzer, the oxygen cathode electrolysis technology is another advanced technology in the industry. The oxygen cathode electrolysis technology is designed with reference to the principle of fuel cell. Its cathode is special and uses porous gas diffusion materials, which is called oxygen cathode (ODC). Under the action of direct current, oxygen reacts at the cathode to produce oh-, but does not produce hydrogen. Sodium chloride is ionized in the anode chamber, and cl- is oxidized to generate chlorine. Compared with the zero pole distance sub membrane electrolyzer, this technology has better energy saving and consumption reduction effect, and theoretically the power consumption can be reduced by 30%.
1.4. Current situation: China has a high self-sufficiency rate
China's imports of caustic soda are small, accounting for less than 1%. From 2017 to 2021, China's imports of caustic soda remained low, with a low proportion of imports. Among them, the lowest proportion of imports was in 2017, the proportion of imports was only 0.03%, and the import volume was 10900 tons; The highest is 2019, with the import proportion of 0.29% and the import volume of 98600 tons. In 2021, China imported 54700 tons of caustic soda, accounting for 0.15%, an increase of 0.12 percentage points over 2017. The import has a slight impact on the consumption of China's caustic soda industry. China is a net exporter of caustic soda, and the export volume accounts for a relatively low proportion in the apparent consumption. From 2017 to 2021, China's export volume of caustic soda fluctuated between 1.1 million tons and 1.52 million tons, significantly higher than the import volume. Domestic self-produced caustic soda can meet downstream demand; The proportion of exports fluctuates between 3.15% and 4.40%. In 2021, China exported 1.4838 million tons of caustic soda, with a net export of 1.4291 million tons, only lower than the export level in 2017; Exports accounted for 3.86%, about 0.5% lower than that in 2017, with little impact on the domestic market.
2. supply: capacity growth is limited and supply will be tight in the future
2.1. China is a major producer of caustic soda in the world
China is a major producer of caustic soda, with nearly half of its production capacity. According to the annual report of chlor alkali chemical (12.820, -0.04, -0.31%), the global caustic soda production capacity in 2020 was 99.74 million tons / year, an increase of 2.40% year-on-year. In 2020, China's total capacity of caustic soda will be 44.7 million tons / year, accounting for 44.82% of the global total capacity in that year. According to the data of China Chlor Alkali Industry Association, the annual capacity of caustic soda in China in 2018 was 42.59 million tons, accounting for 44.27%; North America ranks second in the global caustic soda production capacity, with an annual production capacity of 16.4 million tons, accounting for 17.05%; Europe ranks third with an annual production capacity of 11.56 million tons, accounting for 12.02%. The capacity of other countries or regions is less than 10 million tons.
2.2. Capacity growth is limited and concentration is expected to increase
2.2.1. Low speed growth of caustic soda production capacity
In recent years, the overall capacity of caustic soda industry has been released slowly. In terms of production capacity, in 2021, the production capacity of liquid alkali was 45.634 million tons / year, with a year-on-year increase of 1.42%, and the growth rate reached a new low in recent five years. Since 2017, the capacity of liquid caustic soda has increased steadily. Based on the annual capacity of 41.2 million tons in 2017, the compound annual growth rate is 2.59%. In terms of effective capacity, in 2021, the effective capacity of liquid alkali was 42.889 million tons / year, with a year-on-year increase of 1.45%. Over the past five years, the effective capacity of the industry has fluctuated slightly. Based on the effective capacity of 40.94 million tons / year in 2017, the compound annual growth rate is 1.17%, with a slow growth.
The overall new capacity of caustic soda industry will be low in the future. According to the data of Baichuan Yingfu, 13 enterprises plan to increase liquid alkali production capacity in 2022, with a maximum increase of 600000 tons for a single enterprise. A total of 2.44 million tons of new industrial capacity was added, accounting for 5.35% of the total capacity in 2021. In 2021, seven enterprises announced plans to expand production, with a planned increase of 1.11 million tons and an actual increase of 350000 tons, with a completion rate of 31.5%. Assuming this completion rate is maintained, it is estimated that in 2022, 769000 tons of liquid caustic soda will be added, 1.68% higher than the total capacity in 2021 and 0.91% lower than the compound growth rate in recent five years.
2.2.2. Capacity expansion restricted by policies
In 2007, the national development and Reform Commission issued the access conditions for chlor alkali industry, which made it difficult for small capacity enterprises to enter the market. According to the requirements of access conditions, the scale of newly-built caustic soda plant must be more than 300000 tons / year, so it is difficult for small-scale enterprises to enter the market. At present, there are 102 enterprises with an annual capacity of less than 300000 tons, accounting for 61.82%, that is, before the release of access conditions, most of the new enterprises in the industry were small capacity enterprises. This condition has greatly restricted the industry's new capacity projects, and the industry concentration has been improved.
In 2016 and 2019, affected by the adjustment of industrial structure, backward production capacity gradually withdrew. In july2016, the guiding opinions of the general office of the State Council on restructuring, promoting transformation and increasing benefits of the petrochemical industry were issued. The opinion points out that the key task is to strive to resolve the excess capacity and strictly control the new capacity of excess industries such as calcium carbide, PVC and soda ash. The people's governments of Shandong, Inner Mongolia, Henan and other provinces have followed suit and issued Implementation Opinions on adjusting the structure of petrochemical industry, promoting transformation and increasing benefits. Subsequently, in October, 2019, in the guidance catalogue for industrial structure adjustment, caustic soda was listed as a restricted industry, which increased the capacity barrier of the caustic soda industry, and the capacity of small-scale and poor technology was gradually cleared out.
Since the carbon neutralization target was put forward in 2020, the state has issued a series of relevant policies for the caustic soda industry. Caustic soda is listed as a restricted industry in the Guiding Catalogue for industrial structure adjustment issued in 2019. In November, 2021, the national development and Reform Commission issued the benchmark level and benchmark level of energy efficiency in key areas of high energy consuming industries, which specified in detail the benchmark level and benchmark level of energy efficiency of ionic membrane liquid alkali, and proposed that the proposed and under construction projects should strive to fully reach the benchmark level, and the stock projects should reasonably set a transition period for policy implementation. In february2022, the national development and Reform Commission released the guidelines for the implementation of energy conservation, carbon reduction, transformation and upgrading in key areas of high energy consuming industries. On the one hand, the document points out that by the end of 2020, the capacity of China's caustic soda industry whose energy efficiency is better than the benchmark level accounts for about 15%, and the capacity whose energy efficiency is lower than the benchmark level accounts for about 25%; On the other hand, it is proposed that by 2025, the proportion of capacity above the energy efficiency benchmark level in the caustic soda industry will reach 40%, and the capacity below the energy efficiency benchmark level will be basically cleared.
2.2.3. Industry concentration is expected to increase
The concentration of liquid alkali industry is low and the market competition is fierce. By the end of 2021, there were 158 liquid alkali enterprises with production capacity in China, with a large number of enterprises. According to the data of Baichuan Yingfu, there are only four enterprises with a capacity of more than 1million T / A in all production enterprises, namely, Xinjiang Zhongtai, Liaocheng Xinyuan group, Xinjiang Tianye (6.860, 0.01, 0.15%) and Haobang chemical, with a capacity of 1.35, 1.13, 1.1 and 1.05 million T / a respectively, accounting for 2.96%, 2.48%, 2.41% and 2.30% respectively; There are 10 enterprises with an annual capacity of more than 600000 tons. The industry is dominated by small and medium-sized enterprises, cr4=10.15%, cr10=20.23%, which is a competitive market.
Low energy production enterprises have withdrawn one after another, and low energy efficiency enterprises are about to be cleared out. In 2019, a total of 6 liquid alkali production enterprises were eliminated, with a total of 520000 tons withdrawn. Among them, three enterprises with a production capacity of less than 300000 t / a have no production capacity and quit the market.
Low energy enterprises are transforming to high capacity, and the concentration of liquid alkali industry is expected to increase. In 2020 and 2021, the number of high-capacity enterprises will increase from 9 to 10, and the total capacity will increase from 8.48 million to 9.23 million tons; The number of low-energy enterprises decreased from 103 to 102, but their total capacity increased. Some low capacity enterprises choose to withdraw from the market, while others are gradually changing to high capacity.
2.3. Output growth slows down and inventory runs at a low level
In recent years, the output of caustic soda has been relatively stable. In terms of liquid alkali, from 2017 to 2021, the output of liquid alkali increased from 34.2749 million tons to 35.8817 million tons, with a compound annual growth rate of only 1.15%. From 2018 to 2019, due to the introduction of policies on supply side structural reform and other aspects, the output increased negatively and decreased to 31.286 million tons. Then it recovered steadily. In 2020 and 2021, the output increased by 7.10% year-on-year. In terms of flake alkali, from 2018 to 2021, the output of flake alkali increased from 4.6399 million tons to 4.7712 million tons, and the output was basically flat. The compound annual growth rate was only 0.93%, which was lower than that of liquid alkali. Specifically, only in 2020, the output of flake soda achieved positive growth, and in 2019 and 2021, the output declined year-on-year.
The capacity utilization rate of liquid caustic soda is basically stable, and the capacity utilization rate of flake caustic soda has declined in recent years. In terms of liquid alkali, in recent years, except that the industrial capacity utilization rate was high in 2017, reaching 83.19%, the capacity utilization rate in the following four years was between 72% and 79%, with a small fluctuation range. Among them, the capacity utilization rate in 2021 was 78.63%, the highest in recent four years. In terms of flake caustic soda, from 2018 to 2021, the capacity utilization ratio decreased from 80.55% to 70.06%, a decrease of more than 10 percentage points. Among them, only in 2020, the capacity utilization rate was high, which was 78.85%, which led to the increase of flake alkali production in that year. Overall, from 2018 to 2020, the capacity utilization rates of the two countries are relatively close. In 2021, the utilization rate of liquid caustic soda production capacity will rise, and flake caustic soda will decline sharply, and the gap between the two will increase
The inventory of liquid caustic soda has decreased compared with the past, and the recent low point has stabilized. Throughout 2019, the inventory of liquid caustic soda remained relatively stable at around 185000 tons. By 2020, the amplitude of liquid alkali inventory will increase and the fluctuation will intensify, and the fluctuation range will move up as a whole. The annual maximum inventory will be 265000 tons and the minimum inventory will be 173100 tons. Since 2021, the inventory of liquid caustic soda has shown a downward trend as a whole. At the beginning of January 2021, the inventory was 239000 tons, and then it fluctuated downward, reaching the lowest point at the end of October 2021. The inventory was 134000 tons. As of April 29, 2022, the inventory of liquid caustic soda has recovered slightly, with an inventory of 171800 tons, but it is still at a low point in the long run, down 22.75% compared with the same period in 2020.
The inventory of flake caustic soda continues to decline and is currently close to the historical lowest point. From January 2020 to April 2020, the flake alkali reservoir experienced a substantial increase and decline in a short period of time, and the volatility increased. From the middle of February to the middle of April, the inventory of flake caustic soda remained at a high level, with an inventory of more than 340000 tons. From May to September 2020, the inventory of flake caustic soda fluctuated at a low level, and the center remained around 130000 tons. Since then, the low level of flake alkali inventory has stabilized, and the inventory has remained below 100000 tons, showing a slow downward trend. As of April 29, 2022, the inventory of flake caustic soda was 19200 tons, a year-on-year decrease of 72.57%, a decrease of 83.66% compared with the same period in 2020, only 4200 tons higher than the historical lowest point.
3. demand: the downstream is generally good, and the high aluminum price drives the growth
3.1. China's economy as a whole is improving, and the price index of chemical products is high
The national economic development will affect the demand growth rate of caustic soda industry. There are many downstream applications of caustic soda, including alumina, chemical industry, light industry, printing and dyeing, papermaking, viscose staple fiber, etc. In 2021, the consumption of caustic soda in papermaking, light industry and chemical industry accounted for 8.42%, 12.04% and 9.78% respectively, with a total of 30.24%. Therefore, the downstream demand for caustic soda is greatly affected by light industry and chemical industry.
China's overall economic growth is stable and fast. The most important indicator that reflects a country's economic operation and development level is gross domestic product (GDP). Over the past 10 years, China's GDP and per capita GDP have continued to grow, maintaining a relatively stable growth rate. In 2021, China's GDP and per capita GDP will be 114.37 trillion yuan and 80976 yuan respectively, with a year-on-year increase of 8.1% and 8.0% respectively. China's economy as a whole will continue to improve. At the same time, according to the government work report released in March 2022, China's expected target in 2022 is GDP growth of about 5.5%.
The industrial added value continues to grow, and the growth rate will accelerate in 2021. All industrial added value is an integral part of GDP, which reflects the newly added value generated by all production activities of industrial enterprises during the reporting period. Chemical industry and light industry belong to industry. In the past 10 years, China's industrial added value continued to increase. In 2021, China's total industrial added value was 37.26 trillion yuan, a year-on-year increase of 9.6%, which was significantly higher than the growth rate in 2020.
The added value of each specific industry applying caustic soda has maintained positive growth in recent years. The industry classification statistics method of light industry and heavy industry has been stopped in 2013. At present, light industry refers to food manufacturing, beverage manufacturing, papermaking and printing, chemical manufacturing, synthetic fiber manufacturing, household chemicals and other industries. At the same time, these industries are also important fields for caustic soda application. In 2021, the added value of chemical raw materials and chemical products manufacturing industry, chemical fiber manufacturing industry, papermaking and paper manufacturing industry and food manufacturing industry increased by 7.7%, 7.2%, 6.3% and 8.0% respectively compared with 2020, and the growth rate was higher than that in 2020.
The price index of China's chemical products is high, and it is still in the upward channel. In order to enable industry practitioners and researchers to timely and accurately understand the prosperity of the chemical industry and predict the market trend, Sinopec released the China chemical product price index (CCPI), also known as the comprehensive index of chemical sales and customer procurement, on September 1, 2009. Since April, 2020, CCPI has been in the upward channel. As of May 6, 2022, CCPI reported 5882 points, up 16.31% year-on-year and 77.54% year-on-year, indicating that the prosperity of China's chemical industry continues to rise.
3.2. Alumina is the main downstream, and the industry is expected to accelerate its growth
Alumina is the largest downstream consumption area of caustic soda, accounting for nearly one third. There are many downstream applications of caustic soda, among which alumina accounts for the largest proportion. In the downstream consumption structure of caustic soda in 2021, alumina consumption accounted for 29.32%, with a total consumption of 10.5219 million tons of caustic soda. In recent years, the proportion of alumina consumption is relatively stable. From 2019 to 2021, the proportion of alumina consumption is 34%, 30.51% and 29.32% respectively.
Industry supply and demand grew steadily. In 2021, the capacity, output and apparent consumption of China's alumina industry will be 8924.00, 732770 and 76.5137 million tons respectively. On the supply side, the alumina production capacity increased by 8.31% and the output increased by 5.18% from 2017 to 2021, and the industry capacity utilization ratio declined. On the demand side, the apparent consumption of alumina has increased by 5.56% in the past five years, slightly faster than the output growth, and the supply and demand situation of the industry is improving.
The import volume of the industry has increased in recent years, and the export volume has remained low. In terms of import, except that the import volume decreased significantly and the export volume increased significantly in 2018, the alumina import volume in other years was much higher than the export volume. China is a net importer of alumina, and the current domestic alumina output can not meet the downstream demand. In 2020, China's alumina imports increased significantly to 3.858 million tons, a year-on-year increase of 131.31%, exceeding 3million tons for the first time, accounting for 5.29%. In 2021, China's import scale will be maintained, with an import volume of 3.3262 million tons, accounting for 4.35%. In terms of export, except that the export volume reached 1474800 tons in 2018, the export volume in other years was less than 300000 tons, accounting for less than 0.40%. The alumina produced in China is mainly used for domestic consumption.
3.2.1. Alumina capacity expansion and obvious industry regionality
Alumina production capacity is highly concentrated, with significant regional characteristics. From the distribution of production areas, East China and North China are the main alumina production areas in China. In 2021, the alumina production capacity of the two regions will be 29.1 million tons and 27.29 million tons / year respectively, accounting for 32.61% and 30.58% respectively, a total of 63.19%. According to the statistics of specific provinces, the top five provinces with alumina production capacity are Shandong Province, Shanxi Province, Guangxi Province, Henan Province and Guizhou Province.
The regional concentration of alumina production capacity is mainly attributed to the distribution of bauxite resources. According to the data of Baichuan Yingfu, the main bauxite production areas are Guangxi, Henan and Shanxi, and the output of the three provinces accounts for 79.52% of the country. At the same time, as a coastal province, Shandong has many coastal ports, and Yantai port is the largest bauxite distribution center in China. Therefore, alumina production enterprises are relatively concentrated in areas with rich bauxite resources and high import volume, and the industry is distributed regionally. Over the past few years, alumina production capacity has grown steadily and is expected to continue to rise in the future. From 2017 to 2021, the annual capacity of alumina continued to grow, and the growth rate was relatively stable. The annual capacity of alumina increased from 82.39 million tons to 89.24 million tons, with a compound annual growth rate of 2.02%. Up to now, the production capacity in 2022 has increased to 97.74 million tons / year, 6.1 million tons higher than that in 2021, with a growth rate of 9.52%. The growth rate has been much higher than the growth rate of alumina production capacity in the past few years, and it is expected that the subsequent production capacity will continue to increase.
In 2022, there will be more new capacity of alumina, and the industry will expand rapidly. According to the disclosed production plans of various enterprises, it is estimated that 11.5 million tons of new capacity will be added in 2022, accounting for 12.9% of the total capacity in 2021. The industry is expanding rapidly, and the demand for caustic soda will increase rapidly. In 2022, a total of 7 enterprises plan to expand production, with a maximum increase of 4million tons and a minimum increase of 400000 tons for a single enterprise, all of which are large-scale production plans.
3.2.2. Recovery of alumina production and recovery of capacity utilization
Alumina output fluctuates slightly, with a large increase in 2021. From 2017 to 2020, alumina output fluctuated within a narrow range of 68.2 to 71.3 million tons. The output in 2018 was the highest in four years, reaching 71.2613 million tons. In the following two years, the output continued to decline by 3.15% and 1.15% respectively. In 2021, the output of alumina reached 73.286 million tons, a new high in recent five years, with a year-on-year increase of 7.41%. Based on the output in 2017, the compound annual growth rate of alumina output was 1.27%, lower than the capacity growth rate.
The utilization rate of alumina production capacity has rebounded and has not yet returned to the highest level. From 2017 to 2018, the alumina capacity utilization rates were 84.56% and 84.59% respectively, belonging to a high level. Subsequently, from 2019 to 2020, the capacity utilization ratio decreased continuously, to 80.13% and 77.67% respectively. Therefore, although the alumina production capacity continued to rise from 2019 to 2020, the output of that year fell. In 2021, the capacity utilization rate rebounded significantly, up about 4.5 percentage points from 2020 to 82.12%, but there is still room for improvement from the historical peak.
Among the main alumina producing areas, the alumina operating rates in Henan and Shanxi have decreased significantly. Before 2019, the operating rates of alumina production areas were basically flat. Since 2019, the operating rates of Henan and Shanxi have declined significantly, and the gap has gradually widened. In May, 2020, the monthly operating rates of Shandong and Guangxi were as high as 95.57% and 89.42% respectively, while those of Henan and Shanxi were 74.98% and 58.17% respectively. In 2021, the monthly operating rate of Henan and Shanxi will rise and stabilize at more than 70%. As of March 2022, the monthly operating rates of Henan and Shanxi are 78.85% and 71.43% respectively, which still lags about 10 percentage points behind Shandong and Guangxi.
3.2.3. Low alumina inventory stabilized and profit margin increased
Before August 2019, alumina inventory continued to fluctuate. At the beginning of 2018, the alumina inventory was 1.7016 million tons. Since then, the inventory has continued to fluctuate, with a sharp change, but the center is basically stable, maintaining around 1.8 million tons. At the beginning of november2018, alumina inventory dropped sharply, with the minimum inventory of 1.525 million tons, a record low; At the end of November, the inventory volume rebounded rapidly and recovered to about 1.7 million tons again, continuing the previous fluctuation law. After August 2019, the alumina inventory is relatively stable and currently at a historical low. At the beginning of August 2019, the alumina inventory was 1810900 tons. Since then, the inventory level has been maintained for a long time, with a slight decline. By the end of July 2020, the inventory will be 1.7328 million tons. Since then, the inventory has decreased significantly. In late August 2020, the inventory was only 1.5638 million tons, 9.75% lower than that in July. Subsequently, the inventory rose slightly and stabilized in the range of 1.53 to 1.6 million tons from February 2021. As of may6,2022, the inventory was 1.675 million tons, at a historical low.
Alumina is mainly used in the manufacture of electrolytic aluminum, with a stable consumption structure. The downstream application fields of alumina are only electrolytic aluminum and non metallurgical aluminum. In 2021, the consumption of electrolytic aluminum will account for 95%, and that of non metallurgical aluminum will account for 5%. Almost all alumina will be used in the production of electrolytic aluminum. From 2018 to 2021, the consumption of electrolytic aluminum increased from 67.2631 million tons to 69.5752 million tons, with a compound growth rate of 1.13%. During this period, the alumina consumption structure remained stable, and the proportion of electrolytic aluminum consumption remained above 95%.
Alumina prices have stabilized after rising. At the beginning of 2018, the price of alumina was 2853 yuan / ton, and then fluctuated downward. By the end of February 2020, the price was 2564 yuan / ton. From March, 2020, the price of alumina continued to decline slightly, fell to the lowest point of 2068 yuan / ton and then recovered, and the price center remained stable at 2350 yuan / ton. From August 2021, the price began to rise rapidly, from 2539 yuan / ton to 4102 yuan / ton, an increase of 61.56%, and then fell back and stabilized. As of may6,2022, the average market price of alumina is 2997 yuan / ton.
The price of electrolytic aluminum rose rapidly and was at an all-time high. Before february2020, the price of electrolytic aluminum will be stable, the price center will remain around 13700 yuan / ton, and the fluctuation range is very small. Since March 2020, the price has risen rapidly after a slight drop, from 11708 yuan / ton in March to 24130 yuan / ton in October 2021, an increase of 106.10%. At present, the price of electrolytic aluminum has dropped slightly and is still in the upward channel. As of may6,2022, the average quotation is 20327 yuan / ton, which is at a historical high. The price difference between electrolytic aluminum and alumina continued to rise, driving up the profit margin. Since april2020, the price of electrolytic aluminum has continued to rise, with a maximum increase of 65.8%, and the growth momentum has not decreased. At the same time, the increase of alumina price is relatively small, and the price difference between them continues to widen. It can be seen that the price difference trend is similar to that of electrolytic aluminum. The higher profit of electrolytic aluminum supports the demand for alumina and drives the demand for caustic soda, that is, the demand transmission mechanism of "electrolytic aluminum aluminum oxide caustic soda".
3.3. The demand for electrolytic aluminum is growing steadily, and the downstream fields are making concerted efforts
The consumption of electrolytic aluminum shows an upward trend and has continued to grow at a high speed in the past two years. In 2017, the apparent consumption of electrolytic aluminum in China was 36.4992 million tons, which has declined slightly for two consecutive years. In 2020, driven by the emerging downstream fields, the electrolytic aluminum industry developed rapidly. Even if it was hit by the epidemic, the consumption still increased significantly to 37.9177 million tons, an increase of 7.71% year-on-year. In 2021, the momentum of China's electrolytic aluminum industry remained the same, with the apparent consumption of 39.8906 million tons, an increase of 5.20% year-on-year. Based on the consumption in 2017, the compound annual growth rate is 2.25%, and the demand for electrolytic aluminum is gradually increasing.
3.3.1. The growth of the construction industry stabilized and the demand for alumina recovered
The consumption of electrolytic aluminum in the construction real estate industry continued to increase. Electrolytic aluminum is mainly used for aluminum doors and windows, building curtain walls and decorations installed after construction in the field of building real estate, which is highly related to the completion of real estate. From the consumption of electrolytic aluminum in the real estate industry, the demand for electrolytic aluminum in the real estate industry has continued to increase since 2019. In 2021, the consumption of electrolytic aluminum in the construction real estate industry was 10.7705 million tons, with a year-on-year increase of 5.20% and a compound annual growth rate of 6.45%.
In 2021, the real estate industry will be stable as a whole, and the demand for electrolytic aluminum will recover. In 2021, the completed investment in real estate development nationwide was 14.76 trillion yuan, a year-on-year increase of 4.40%; The new construction area of real estate was 1.989 billion square meters, a year-on-year decrease of 11.40%. The new construction area has experienced negative growth for two consecutive years; The construction area was 9.754 billion square meters, a year-on-year increase of 5.20%; The completed area was 1014million square meters, an increase of 11.20% year-on-year. Compared with 2020, the construction and completed area of real estate has changed from negative growth to positive growth, and the real estate industry has recovered. It is expected that with the improvement of the epidemic situation in China, the area of real estate commencement, construction and completion will increase, and the demand for aluminum is expected to continue to rise.
4. trend: supply and demand expectations are tightening, and prices are entering the upward channel
4.1. Historical repeat of caustic soda price
In the first stage, the price of caustic soda operated stably and fluctuated slightly within the range. From 2013 to the middle of 2016, the price of caustic soda (32% ion-exchange membrane) was basically stable, with the lowest price of 620 yuan / ton in February 2015 and the highest price of 778 yuan / ton in January 2013. During this period, the domestic economy grew slowly, the industry continued to be in the process of structural adjustment, and the upstream and downstream markets operated smoothly. By june2016, the price of caustic soda (32% ionic membrane) was quoted at 653 yuan / ton.
In the second stage, the price of caustic soda rose to a historical peak. From the second half of 2016 to the end of 2017, the market price of caustic soda (32% ion-exchange membrane) continued to rise, from 653 yuan / ton to 1471 yuan / ton, an increase of 125.27%. In this stage, domestic environmental protection policies and safety policies were strengthened, and relevant documents on supply side structural reform were issued. The output of caustic soda decreases, the downstream demand increases, the contradiction between supply and demand increases, and the price of caustic soda rises all the way.
In the third stage, the price of caustic soda fell back to the low point again. From the beginning of 2018 to February 2021, the high price of caustic soda (32% ion-exchange membrane) fell back, from 1471 yuan / ton to 538 yuan / ton, a decrease of 63.43%, and the price hit a new low since 2013. At this stage, the downstream market demand was low, the supply of caustic soda industry exceeded the demand, and the impact of the epidemic was superimposed. The operating rate of enterprises was insufficient, and the price of caustic soda continued to decline.
In the fourth stage, the price of caustic soda rose and is still at a medium high level. Since March 2021, the price of caustic soda (32% ion-exchange membrane) has risen rapidly, and reached the highest price of 1902 yuan / ton on October 26, an increase of more than 253%. Subsequently, the price fell back to a relatively high level in the past, then stabilized again and rose slightly.
4.2. The price is in the upward channel, and the gross profit of caustic soda rises rapidly
The price of caustic soda has been adjusted in place since the beginning of 2022 and is still in the rising channel. According to the data of Baichuan Yingfu, as of May 5, 2022, the average market price of liquid alkali (32% ion-exchange membrane) was reported to be 1297 yuan / ton, up 32.0% over the beginning of the year. The average price of liquid alkali in the first quarter was reported to be 1114.6 yuan / ton, up 124.4% year-on-year; The average market price of caustic soda (99% flake soda) was reported to be 4224 yuan / ton, up 22.8% over the beginning of the year. The average price of flake soda in the first quarter was reported to be 4051.0 yuan / ton, up 106.7% year-on-year. The historical cost of caustic soda has been stable for a long time and has increased recently. From the beginning of 2018 to November 2020, the cost of liquid caustic soda is stable, and the price center converted into 100% cost is 1370 yuan / ton. From the end of November to the beginning of December 2020, the cost of liquid caustic soda increased significantly, from 1419 yuan / ton to 1652 yuan / ton. Since then, the cost of liquid caustic soda has been rising for a long time, and the growth rate is relatively stable. As of May 6, 2022, the 100% cost of liquid alkali was 1944.59 yuan / ton, an increase of 17.04% over the same period in 2021.
The impact of raw salt price of upstream raw materials is small, and the price difference is in the upward channel. At the beginning of 2018, the price of raw salt was 276 yuan / ton, and has remained stable since then. In the middle of September 2021, the price of raw salt exceeded 300 yuan / ton for the first time in nearly two years, and continued to rise to 480 yuan / ton within two months. After that, the price of crude salt stabilized again and fell slightly. At present, the price of crude salt is 434 yuan / ton. The correlation between the price trend of raw salt and the price trend of caustic soda cost is low. The main reason for the sharp fluctuation of caustic soda cost is the change of water and electricity costs. After deducting the influence of raw salt price, the profit of caustic soda is highly synchronized with the price. The price difference between liquid alkali and raw salt is in the rising channel at present, which is the same as that of liquid alkali.
