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The status quo and development trend of China caustic soda industry
¡ª¡ªWang Li, CCAON

2019-05-23 09:35:59
Wang Li, CCAON, delivers her report of The status quo and development trend of China caustic soda industry 

Ms. Wang's report was separated by 5 aspects: 

Firstly, she analyzed world¡¯s caustic soda supply and demand. The capacity expansion is mainly seen in developing countries like China and India, while the elimination of old capacity occurs mainly in Europe. Caustic soda cost is low in the US due to its shale gas resources, and the export has been increasing, impacting the traditional market in Northeast Asia and the Middle East. Demand in emerging markets such as India and Southeast Asia has increased and has become one of the world's major importers. 

Secondly, she described the caustic soda supply pattern evolve in China. In 2008-2012, economic crisis has affected China economy development. Growth of caustic soda production gradually slowed down. Eastern regions, like East China and North China, has a long development history of caustic soda, and are also the major consuming markets. Viewed from the capacity distribution, Shandong continued to be the province with the largest caustic soda capacity. 

Thirdly, Ms. Wang analyzed the downstream demand of caustic soda in China. With the continuous development of the national economy, caustic soda downstream demand has increased. Apparent demand continued rising year-on-year in 2018. Alumina is the biggest downstream of caustic soda industry in China. Shandong is the main production area for caustic soda, and it is also the most concentrated area for consumption. The alumina industry dominated the caustic soda consumption and the price trends of the two are closely related. 

Fourthly, she introduced the caustic soda market features in the first quarter of 2019. After the Spring Festival holiday, China caustic soda market fluctuated more violently. In East and South China, caustic soda price inched higher, as downstream plants gradually resumed and demand for caustic soda enhanced. In North China, since profit of aluminum oxide narrowed, purchasing price of caustic soda continuously moved lower. In Mar, aluminum oxide cash flow was constantly squeezed, some plants began to suffer losses, and the run rate was revised down. 

Finally, Ms. Wang analyzed the factors affecting the future trend from the angle of supply and demand, government policy and the Belt and Road. Under stricter environmental protection policies, supply is expected to only rise slightly, and demand is supposed to be complicated and changeable. The new policies may focus on controlling the new capacity of caustic soda. With close cooperation with nations around the Belt and Road, export proportion of caustic soda is expected to gradually increase. 
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