Before the holiday, we were in the "Golden September peak season, how is the performance of the caustic soda market different from previous years? Can Silver Ten be unexpected?" The article mentions the reasons why the Jinjiu market is sluggish during the peak season, and simply analyzes the upward expectations of the Silver Tenth market from both supply and demand. At present, the market trend after the National Day holiday is in line with our expectations. Let's conduct a detailed analysis of the supporting factors for the strong upward trend of the Silver Tenth market?
From the supply perspective:Equipment maintenance in chlor-alkali enterprises boosted. Preliminary statistics before the festival show that chlor-alkali companies plan to overhaul more than 10 sets of equipment in October, involving a production capacity of nearly 3 million tons. However, according to the latest statistics from Tuduo's current data, about 14 sets of devices were overhauled in October, involving a production capacity of about 3.8 million tons. At the same time, it does not rule out temporary equipment. The overall regional support for the market and the supply side support is strengthened., which will definitely boost prices, and prices continue to increase slightly.
From the perspective of demand:There is an increase in downstream demand. In terms of the main downstream alumina industry, 1 million tons of Shandong's main downstream alumina enterprises have been invested in the 4 million tons production capacity replacement project on Tuesday, which has a certain incremental demand for caustic soda procurement; in addition, alumina prices are currently at an annual high and still On the upward trend, the industry is in a state of high profits. Alumina companies are more enthusiastic to start operations and have increased expectations for caustic soda demand. There is a demand for replenishment after the non-aluminum downstream holiday, and there is also a small situation where there is just a need to follow up. At present, amid rising prices, the enthusiasm of traders and downstream market operations has increased relatively. The demand side supports the market.
Judging from the price of liquid alkali purchased by downstream alumina companies:In October, Shanxi, Henan and Guangxi, the price of liquid alkali purchased by alumina companies ranged from 100 to 200 yuan/ton, which provided significant support for the market; the price of liquid alkali purchased by major downstream alumina companies in Shandong increased by 50 yuan/ton. The increase is 815 yuan/ton, the highest increase so far this year, and the purchase price of liquid alkali of major downstream alumina companies in Shandong has also reached the high annual price so far, which undoubtedly adds to the icing on the cake to the market.
From a transportation perspective,After the National Day holiday, transportation in most regions of China resumed, and the circulation of goods has basically returned to normal transportation; while freight rates have increased in some areas; there is certain resistance to the transportation of hazardous chemicals in some areas, and the circulation of goods is not smooth and the transportation efficiency is not high, which has certain positive support for the market.
In terms of market mentality:After the price of caustic soda rose, market sentiment improved, and most operators had a bullish attitude towards the future outlook. In addition, the price of liquid chlorine has dropped significantly after the holiday. Although there have been cases of reimbursement in the past two days, the overall profitability of chlor-alkali enterprises is not good, and chlor-alkali enterprises have a certain mentality of supporting prices.
Overall, under the support of fundamentals in the caustic soda market in October, there were still upward expectations in the liquid caustic soda and flake caustic soda markets, but the increase was relatively limited. In the later period, with the continuous recovery of maintenance equipment and entering the traditional off-season demand, the fundamentals are exhausted. The contradiction between supply and demand will gradually increase, and the market may show a downward trend.
