What drives the price spread between sodium metal and its downstream caustic soda chain?

What drives the price spread between sodium metal and its downstream caustic soda chain?
China's caustic soda market in late 2023 showed how sodium-chain pricing can diverge sharply between spot and futures. Caustic soda futures launched in September 2023 with a premium, then fell while physical 32% liquid caustic in Shandong kept climbing to 1,010 yuan/ton by mid-October, pushing the basis to a record 1,150 yuan. Inventory then ballooned 55% month-on-month to 282,000 tons by end-October, forcing spot prices down to 760 yuan by late November, near production cost. With 2024 capacity set to grow roughly 4.8% on planned additions, oversupply pressure is building. Alumina consumes about 30% of caustic output, so alumina demand remains the key swing factor for the entire sodium value chain.