Caustic soda: outstanding contradictions in regional production and sales structure

Affected by the macroeconomic policies of the country, the expansion of non-ferrous metals and other industries in the downstream of caustic soda will slow down, leading to a declining definition of the weak season for consumption in the domestic caustic soda market. Under the condition of increasing production capacity, the demand will be insufficient. The pressure is getting bigger and bigger. Although the production costs such as electricity price and manpower have risen, the market price of caustic soda has not been greatly improved.
The new statistics show that it is difficult to effectively release the latest statistics. As of the end of 2009, China's caustic soda plant capacity has reached 27.93 million tons. In the first half of 2010, the domestic plan for new caustic soda projects will reach 2.975 million tons and will continue to increase in the second half of the year. 3 million tons, if successfully put into production, it is expected that the annual production capacity of new caustic soda will reach 5.97 million tons or more. In 2010, the Chinese caustic soda industry has seen an increase in production capacity and insufficient demand pressure.
In recent years, there has been a certain increase in the apparent demand for caustic soda in the country. In 2007, China's demand for caustic soda production was 16.15 million tons, and in 2008 it was 16.47 million tons. In 2009, it increased about 1.4 million tons on the basis of 2008. Comparing the data, it can be found that the growth rate of domestic demand for caustic soda is far lower than the growth of production capacity. The Chinese caustic soda industry will face greater variables in terms of operating capacity under the premise of continuously increasing production capacity. In the severe market environment in 2009, the domestic caustic soda plant operating rate still recovered quickly, but due to the increase in production capacity in the caustic soda industry this year, the pressure of insufficient demand has increased. Therefore, it is expected that the new caustic soda production capacity in China will not be effectively released in 2010. .
Looking at the product structure of new capacity, the structural upgrade of Chinese caustic soda products continues to advance. In 2010, the domestic capacity of the existing caustic soda plant will be 280,000 tons, and the increase will be in addition to a small amount of diaphragm alkali. With the exception of technological changes, the remaining parts are all ion membrane alkaline equipment. It is expected that the proportion of domestic diaphragm alkali production capacity in total capacity will continue to decline in 2010.
The low price of market prices In terms of industrial layout, the ratio of caustic soda production capacity in the North China, East China, Central China, and Northwest China regions in 2009 was 39%, 22%, 12%, and 13% respectively. Among them, the proportion of production capacity in the central and western regions has increased further compared to 2008. According to statistics, in 2010, the planned production capacity of the four provinces of Inner Mongolia, Shaanxi, Xinjiang, and Henan will be 580,000 tons, 400,000 tons, 300,000 tons, and 120,000 tons respectively, both of which rank in the forefront of the domestic market. The production capacity and output of caustic soda in the central and western regions It is inevitable that the ratio will increase year by year. However, at the same time, the transportation radius of liquid caustic soda products is limited, and the highly concentrated western caustic soda's overcapacity in the local area will become increasingly prominent. At present, the demand for caustic soda in the northwest region is very limited. Even if local companies convert liquid caustic soda into easily producible caustic soda, they still need to face the problem of low acceptance and low acceptance of downstream customers. Therefore, the production and sales structure of the caustic soda industry in the region does not match this year. The contradictions will be further manifested.
A large part of the new chlor-alkali projects in the western region is more focused on the development of chlorine products with higher added value, while neglecting the overall consideration of caustic soda products. The universal expansion model of "caustic soda + polyvinyl chloride" has, in a sense, driven the passive expansion of the caustic soda industry. In 2010, if companies cannot pay enough attention to caustic soda products and focus on long-term development, it is very likely to contain some of the company's overall profits. At the same time, the different positioning of products by different companies will play a different role in the production and price adjustment of chlorine and caustic soda products.
The industry's analysis of factors such as supply and demand in the caustic soda industry believes that in 2010, the domestic caustic soda market will become less and less descriptive for the low season of consumption, and the price will be dominated by low-to-medium consolidation. Moreover, due to the influence of national macro-industry policies, the expansion of the expansion of certain industries such as non-ferrous metals downstream of caustic soda will slow down. Therefore, the market price of caustic soda as a basic chemical raw material for the national economy in 2010 is unlikely to be greatly improved. Although the current economic situation has improved, and taking into account factors such as the increase in electricity prices and labor costs, cost support will also play a role. However, it is still unrealistic for chlor-alkali enterprises to sell caustic soda sales back to high prices.
Exports are expected to rebound. From 2005 to 2008, China's caustic soda export business has achieved rapid development. The export volume has been increasing year by year. However, in 2009, the export volume and export price of caustic soda in China both suffered heavy losses. In particular, the export of liquid caustic soda was hit hardest. From January to November 2009, China's cumulative export volume of liquid caustic soda was 824,000 tons, which was a substantial reduction of approximately 661,000 tons compared with the same period of 2008. This is related to the international trade in liquid caustic soda mainly concentrated in the three major countries of the United States, Australia, and Canada.
In view of the expectations of the recovery of the global economy in 2010, the industry believes that China's caustic soda export trade will tend to improve in 2010, but there are still difficulties in recovering to the level before the financial crisis. The problem of the relative concentration of world liquid caustic soda flows will continue to manifest itself in 2010. China's caustic soda exports are still largely related to the recovery of demand in developed countries.
In addition, in order to protect the environment and achieve energy conservation, emission reduction and cleaner production, the Ministry of Environmental Protection issued the "Cleaner Production Standard Chlor-alkali Industry (Caustic Soda)" (HJ 475-2009) in August 2009 and quantified in three levels. The indicators in the production process of the chlor-alkali industry, and the requirements of the State Administration of Work Safety for safe production are getting higher and higher. Therefore, in 2010, chloro-alkali enterprises' investment in safety and environmental protection will only increase. Enterprises need to face more severe tests to achieve efficiency gains.

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