I. Price Trend
According to the commodity analysis system of Business Society, caustic soda prices showed a weak trend this week. The average market price at the beginning of the week was 628 yuan/ton, and by the weekend, it had fallen to 622 yuan/ton, representing a decline of 0.96% week-on-week and a year-on-year decrease of 38.72%. On February 5, the Business Society Chemical Index stood at 797 points, down 2 points from the previous day. Compared to the cycle high of 1,400 points (October 23, 2021), it has decreased by 43.07%, while it has increased by 33.28% compared to the cycle low of 598 points (April 8, 2020). (Note: The cycle refers to the period from December 1, 2011, to the present.)

II. Market Analysis
According to the commodity analysis system of Business Society, caustic soda prices remained weak this week. In Shandong, the mainstream market price for 32% ion-exchange membrane caustic soda ranged from 550 to 650 yuan/ton. In Zhejiang, prices remained stable, with the mainstream market price for 32% ion-exchange membrane caustic soda ranging from 850 to 970 yuan/ton. In Inner Mongolia, prices were consolidating, with the mainstream market price for 32% ion-exchange membrane caustic soda (on a 100% basis) ranging from 2,200 to 2,300 yuan/ton.

This week, the supply of caustic soda remained ample, with no significant reduction in enterprise inventories. In Shandong, the overall load of liquid caustic soda remained high, while the profitability of the chlor-alkali industry was low, providing some support from the cost side. Downstream alumina producers showed moderate enthusiasm for entering the market. In the north, due to weather conditions and the gradual reduction of pre-holiday stockpiling for the Spring Festival, the market remained in a stalemate, with most purchases of caustic soda being made on a demand-driven basis. It is expected that the alumina sector will experience a weak and fluctuating trend in the near future.

Analysts at Business Society believe that caustic soda prices have been weak recently. Domestic downstream purchases have largely been demand-driven, with no favorable support in the Shandong market and no substantial improvement in demand. Quotations for orders outside Shandong have mostly concluded, with the focus now on fulfilling long-term orders. Considering the supply-demand dynamics, it is expected that caustic soda prices will continue to consolidate weakly in the near term, depending on downstream market demand.