ShouChuang Futures: Geopolitical tensions cause sharp fluctuations in caustic soda futures prices at high levels

【Market Commentary】
Geopolitical developments are disrupting the market, causing caustic soda futures prices to experience sharp, high-level volatility.
In the spot market, the price of 32% ion-exchange membrane caustic soda in Shandong is 726 yuan/ton, up 18 yuan/ton from the previous trading day. The Shandong market’s liquid caustic soda prices continue to be raised. Demand for low-grade caustic soda shows no obvious incremental growth, but some caustic soda producers have low inventories, and with futures prices remaining high, the market’s bullish sentiment is strong. High-grade caustic soda is relatively strong in the short term, supported by export orders.
In terms of supply, a 300,000-ton caustic soda and chlorine (chlor-alkali) unit in Jiangsu Haixing is planned to shut down for maintenance for one month from late April to early May. Another large chlor-alkali enterprise in Jiangsu with a 600,000-ton unit plans to start maintenance on April 15 for 15 days. Last week, domestic caustic soda operating rates and inventories fell. With the geopolitical conflict still ongoing, overseas olefin shortages are gradually expanding the range of chlor-alkali units reduced output or shut down, tightening caustic soda supply.
On the demand side, in the near term, domestic alumina operating rates have been recovering relatively slowly. New alumina capacity is awaiting commissioning, while demand from non-aluminum sectors remains steady and driven by rigid needs. Domestic liquid caustic soda export transactions continue to heat up, and prices in Shandong as well as in multiple regions nationwide rise accordingly.
Overall, yesterday the United States proposed a ceasefire negotiation framework, and international oil prices fell on the news. Domestically, the chemical-energy sector adjusted collectively. However, the reductions and shutdowns of chlor-alkali units domestically and abroad induced by geopolitics are still continuing, and caustic soda export demand expectations remain optimistic. It is expected that in the short term, caustic soda futures prices will trade in a high-level, wide-range sideways pattern, so watch geopolitical developments, changes in domestic and overseas units, and the commissioning progress of downstream new capacity. (Founder Futures)