ShouChuang Futures: Rising Costs, Soda Ash Futures Halt Decline and Rebound

On the supply side, Lianyungang Alkali Industry plans to increase operating load, and Inner Mongolia Boyuan Yingen Chemical’s Phase II plans to increase load; caustic soda production capacity utilization is at 85.39%. Last week, total domestic caustic soda inventories at manufacturers were 1.9472 million tons, up 52.8 thousand tons month over month, a gain of 2.79%. This week, caustic soda supply remains at a relatively high level; production is expected to be 820 thousand tons, with operating rates near 88%.

On the demand side, this week Wuhai Sinoglass has one 600-ton production line draining water; Zhengda has one 600-ton production line draining water; and Shabei Safety has a 1050-ton production line ignited for 10 days. For photovoltaic demand, one 1600-ton production line is expected to be ignited. Flat glass output is expected to be 1.0341 million tons per week, and photovoltaic glass in-operation production capacity is 622.4 thousand tons.

In short, caustic soda supply remains at a high level and, following the holiday, the accumulation of inventories is expected to continue. Geopolitical conflicts are still ongoing; the energy-and-chemicals sector rebounds again. It is expected that, in the short term, caustic soda futures prices will fluctuate with a slight bullish bias; watch changes in energy prices, unit maintenance status, and the downstream inventory replenishment pace. (CITIC Futures)