The cost factors prompted a slight recovery in the market. The National Development and Reform Commission announced that since November 20th, the national non-civilian electricity price has increased by an average of 2.8 cents per kilowatt-hour. However, local adjustments have been different. In some regions, chlor-alkali enterprises have been pressured by increased costs, and the cost of caustic soda has been reduced. Therefore, an increase of 50 to 100 yuan, caustic soda companies in the central and western regions took the lead in raising prices, but also drove the overall domestic market atmosphere.
At the end of the recent years, the tightness of train capacity around the country was a common problem throughout the calendar year. In particular, the shipments from the low-cost regions in the western region were reduced, and a favorable market atmosphere was formed on the premise that downstream companies had low stocks. Markets in Central China, North China, and East China have thus slightly increased, and chlor-alkali companies in these regions have also been given the opportunity to increase their operating rates.
In addition, since the middle and late November of November, the northern region was affected by special weather such as heavy snowfall and heavy fog, and automobile transportation received a great deal of impact in the short term. Some chlor-alkali enterprises reduced production, which also contributed to the higher prices in December.
The domestic difference cannot be eliminated in the short term With the launch of large-scale chlor-alkali plants in the western region, local chlor-alkali production capacity will expand rapidly in the future, forming another major chlor-alkali production area in China. The main reason why chlor-alkali was installed in the west is still to have the cost advantage of resources, but the consumption of the local industry chain is relatively slow to develop, and it needs a quick relay to form a support. The main domestic consumption areas are still concentrated in Central China, North China, East China and other regions, and these areas have long-term development in recent years, complete supporting facilities, has formed a strong consumer groups upstream and downstream industry chain, but the production cost of caustic soda is still higher The western region is 20% to 30%. Therefore, regional resource gaps and uneven consumption are still the root causes of differences between domestic regions, and they cannot be eliminated within a short period of time.
Export growth may be less than expected. With the recovery of the domestic macro economy, construction, transportation and other industries will quickly pick up, and at the same time, they will drive the electrolytic aluminum and alumina industry chain. According to statistics, from February to now, the total domestic production of alumina has reached about 5 million tons, which in turn has driven up the consumption of caustic soda. However, due to the impact of the financial crisis and the preferential policies of some foreign countries to increase their export policies, China's alumina imports from January to September increased by 17% compared with the same period of last year. This will undoubtedly curb the operating rate of domestic alumina companies, and the demand for caustic soda remains variable. In addition, as the chemical fiber and textile industry of another major consumption field of caustic soda, the operating rate of enterprises this year has been greatly limited. Although the current operating rate has been increased, it will take some time for full recovery due to the decline in apparel exports.
In addition, in the domestic major export zones of caustic soda, such as Shandong, Jiangsu, and Zhejiang, the export situation remains to be restored, and the current consumption is mainly balanced domestically. From the perspective of exports of various export companies, the growth of exports may be lower than expected.
After the first quarter of next year is expected to recover. With the increase of central and western electricity prices, and the further integration of the chlor-alkali industry chain in provinces such as Henan, Shandong, and Jiangsu, the production cost gap of domestic caustic soda enterprises is expected to shrink. By then, the regional difference in domestic prices will gradually shrink, and regional consumption characteristics will be reduced. more obvious. It is understood that the current domestic chlor-alkali enterprises are still operating in the vicinity of the cost, but the company's geographic location has a slightly different profit margin, which is one of the main reasons leading to the current chlor-alkali enterprises can not significantly increase the operating rate. According to industry experts' forecasts, entering the first quarter of 2010 will be a process of adjustment for the caustic soda industry. Both the overall operating rate and the price will face a new balance point. At the same time, the market will begin to recover in the first quarter.
In December, driven by factors such as increased power costs and tightening capacity at the end of the year, caustic soda prices in most parts of the country rose slightly by 3% to 6%, and the signs of caustic soda prices in the low-altitude operation in the past six months were maintained. The mainstream transaction price in central China is 1700 to 1800 yuan (30% to 100%, ton price, the same below), 1300 to 1400 yuan in East China, 1500 to 1600 yuan in North China, 1600 to 1700 yuan in South China, and 1000 to 1200 in Northwest China. Yuan, the difference in domestic areas is still significant. In view of the current domestic chlor-alkali business start-up and downstream consumption, the slight rebound in the market is only a sign of the industry’s warming signal. The broader market consolidation pattern will continue into the first quarter of next year, and may start a wave of considerable market afterwards.