1. The new standard for caustic soda industry is high, and backward production capacity is gradually eliminated

China is the largest producer of caustic soda in the world and its production capacity accounts for 40% of the world's total. From 2012 to 2015, the growth rate of domestic caustic soda production capacity has gradually declined, and the growth rate has resumed to a momentum in the past two years.

         2. The consumption of by-product liquid chlorine limits the expansion of production capacity

Since the second half of 2016, various environmental protection policies and regulations have been introduced one after another, and the chemical industry is under greater pressure. The production of chlorides from liquid chlorine which is the byproduct of the Chlor-alkali process is limited. The export of liquid chlorineis difficult, and even the caustic soda production enterprises postpone shipping of liquid chlorine. Therefore, in order to avoid liquid chlorine expansion, some companies can only passively reduce the load and the production of caustic soda.

       3.  The prices of the downstream products rising promote the price of caustic soda

               As an important basic chemical raw material, caustic soda has a broad downstream market, which accounted for  71% of  the total, including alumina production, printing and dyeing, chemical industry, and papermaking. Alumina is the most important downstream consumer market in the caustic soda industry, accounting for 29% of the total, followed by the papermaking andtextile industries.