CITIC Construction Investment Futures: The price of 32% ion membrane alkali in Shandong remains stable. In the short term, the increase in caustic soda prices requires production cuts and the fulfillment of export orders.

In Shandong, the mainstream transaction price for 32% caustic soda ion-membrane soda is 600–715 yuan/ton, staying stable versus the average price of the previous trading day. At a local large alumina plant downstream, the procurement price for liquid caustic soda is 590 yuan/ton; the mainstream transaction price for 50% ion-membrane caustic soda in Shandong for liquid caustic soda is 1010–1040 yuan/ton, also staying stable versus the average price of the previous trading day. Demand is still recovering; downstream buyers are not very active in taking delivery, and chlor-alkali companies’ shipments are generally fine. The market prices for liquid caustic soda at 32% and 50% remain stable.

The short-term catalyst lies in concerns about disruption of ethylene-to-PVC feedstock supply in countries such as Japan and South Korea due to spillover from geopolitical conflicts in the Middle East. Some major petrochemical players have expectations of reducing PVC-related operating loads, which would, in turn, lead to a potential expectation of lower caustic soda production rates as part of integrated co-production. Meanwhile, inquiries for Chinese overseas orders have improved. From a fundamentals perspective, both short-term inventories and operating rates remain at high levels. Further price increases would require upstream production cuts and fulfillment of export orders to drive destocking. If orders are not fulfilled as scheduled, there is a significant risk of a sharp price pullback. Keep monitoring strengthening geopolitics. (CITIC Jianjiang Futures)