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It is understood that in recent years, the domestic caustic soda industry has formed a construction boom, especially in western regions where there are advantages in salt and energy. By 2007, the national caustic soda production capacity will be close to 19 million tons. China's caustic soda production capacity has been plagued with oversupply. However, due to the surprisingly good performance of the caustic soda market, strong market demand and firm prices, the excess hidden concern has been temporarily concealed.
For the hot caustic soda market, the analysis of experts is as follows: The reasons for the strong domestic caustic soda market price are many reasons. In 2006, the demand for alumina, chemical fiber, pharmaceuticals, and daily chemicals in the caustic soda downstream industry increased significantly. In particular, the output of alumina increased significantly. In 2004, the production capacity was only 420,000 tons, compared with 2006. In October, the output reached 10.74 million tons, and 1 million tons of alumina required about 85,000 tons of caustic soda. Some experts predict that China's alumina production capacity will soon approach and exceed 30 million tons. The rapid growth of downstream demand led to the firmness of the caustic soda market price. Last year, Chongqing, Sichuan, Guizhou, northern Guizhou, western Hubei, southern Shaanxi, central and southern Gansu, southern Ningxia, and southern Ningxia continued to experience high temperatures and low rainfall. Sichuan and other southwestern regions were the most prominent. Long-term drought and no rain made electricity supply extremely tight. The operating rate of chlor-alkali enterprises in the region decreased, and the supply of caustic soda decreased. In addition, the increase in electricity prices at the end of June last year led directly to an increase in the cost of caustic soda production and a cost support for the price of caustic soda. At the same time, the export volume of caustic soda was much higher than in previous years, and the number of countries involved in exports increased. The export of caustic soda has greatly eased the conflict between supply and demand in the domestic caustic soda market and reduced sales pressure.
However, experts also warned that the production of caustic soda produced in China is being released in recent years. With the conversion of favorable factors, new devices have been put into operation one after another. The overcapacity of caustic soda production is not optimistic.
The reporter recently learned from the China Petroleum and Chemical Industry Association that domestic caustic soda production exceeded 15 million tons in 2006, reaching 15.118 million tons, an increase of 19% year-on-year. Although the current caustic soda market is booming, the production capacity of overheated caustic soda production is being released in recent years, and the overcapacity situation in the caustic soda industry has become increasingly apparent.