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The domestic liquid chlorine market is experiencing narrow fluctuations, and downstream demand is showing active performance
2023/11/28
Liquid chlorine has a wide range of uses as a strong oxidizing agent, used for bleaching in the textile and paper industry, purifying and disinfecting tap water, refining magnesium and other metals, and producing various chlorinated compounds such as pesticides, detergents, plastics, rubber, pharmaceuticals, etc. In chemical production, polyethylene is combined with liquid chlorine to form polyvinyl chloride and chlorinated polyethylene. As the two basic products of chlor alkali enterprises, caustic soda and liquid chlorine are both produced from the same set of chlor alkali equipment. Due to the pricing strategy of manufacturers, in order to maintain total profits, chlor alkali manufacturers have seen both caustic soda and liquid chlorine products rise and fall. But this year, due to the impact of demand side construction, there have been frequent occurrences of both rising and falling prices.
1、 Structural analysis of downstream consumption of liquid chlorine
Liquid chlorine mainly downstream: PVC, chloroacetic acid, phosphorus trichloride, methane chloride, epichlorohydrin, epichlorohydrin, TDI, MDI, chlorinated paraffin, bromine, etc. The consumption of PVC accounts for almost half of the downstream consumption of liquid chlorine, and the market trend and operating conditions of PVC seriously affect the trend of liquid chlorine.
2、 The price trend of domestic liquid chlorine from 2020 to 2023
In 2020, the price of liquid chlorine fluctuated and rose. With the continuous increase in downstream demand for liquid chlorine, production, import, and export gradually increased, and consumption steadily increased year by year. In the fourth quarter of 2021, it performed well, mainly due to the maintenance of some chlor alkali enterprises in the main production areas, low production, reduced supply, favorable market conditions on the supply side, high downstream procurement enthusiasm, and active market transactions, reaching a peak of 4000 yuan/ton, From January to the end of 2022, the domestic liquid chlorine market fluctuated and declined, making it difficult for the demand side to achieve sustained improvement. The game between supply and demand on the market was the main factor, and prices were weakly adjusted. According to Jinlianchuang's statistics, the average price of liquid chlorine in North China from January to November 2023 was 138 yuan/ton, and the average price in 2022 was 377 yuan/ton. According to comparative data, the annual average price of liquid chlorine in North China in 2023 has decreased by 239 yuan/ton compared to 2022, with a decrease of 63.39%. The highest point in the North China market in September 2023 was 850 yuan/ton, and the lowest point occurred in January, with a freight subsidy of 575 yuan/ton.
In 2023, the domestic liquid chlorine market showed an N-shaped trend, with a weak consolidation in January. The operation of chlor alkali plants has been narrowly reduced, and the supply side has limited support for the liquid chlorine market. During the Spring Festival holiday, transportation conditions are inconvenient, and inventory pressure on enterprises is obvious. Downstream demand is weak, and the market trading atmosphere is average. The market price maintains a subsidy of about 500 yuan/ton. In February, downstream operation has been adjusted, and downstream demand has improved. Downstream stocking mentality is slightly positive, and the market price of liquid chlorine has turned negative to positive, At present, the factory price of liquid chlorine for tank trucks in North China has increased to around 300-400 yuan/ton. In March, chlor alkali enterprises entered the seasonal maintenance peak season, with a favorable supply side market. Downstream demand increased, market trading was active, downstream demand improved, enterprise shipments were smooth, and prices were adjusted to be strong. The highest ex factory price of liquid chlorine for tank trucks in North China was around 750 yuan/ton. At the end of the month, downstream industries lowered negative prices, and liquid chlorine prices subsequently declined.
In April, the Qingming holiday was favorable, with some chlor alkali enterprises undergoing equipment maintenance or reducing load, resulting in a decrease in liquid chlorine production. Some regions had a positive attitude towards stocking up, resulting in smooth shipments and decent profit levels for enterprises; Later, due to weak downstream cost support, the main chlorine consuming enterprises engaged in load reduction operations, slowing down their procurement enthusiasm and lowering the purchase price of liquid chlorine. As a result, the price of liquid chlorine fell back to subsidized prices; In May, the maintenance equipment of chlor alkali enterprises gradually resumed, and downstream demand continued to be weak. The market transaction situation was not ideal, and the main downstream PVC industry had poor profits. There were negative operations, and the purchase of liquid chlorine was mainly in demand. Market trading was weak, and operators still held a wait-and-see attitude, with a monthly average price of around -300 yuan/ton. In June, the price of liquid alkali continued to be low, which was relatively favorable for the liquid chlorine market. In order to maintain profits, chlor alkali enterprises sold liquid chlorine at a high price, and the market price of liquid chlorine turned negative to positive.
From July to August, the domestic liquid chlorine market fluctuated upwards. The start-up of chlor alkali plants has been lowered, and there are more maintenance enterprises in the main production area, resulting in a decrease in liquid chlorine production. The supply side is favorable to the market, and downstream stocking mentality is strong. They are actively purchasing liquid chlorine, and demand is active. The pressure on enterprise shipments is not high, and market prices have increased compared to the previous period. The factory price of liquid chlorine for tank trucks in North China is reported to be around 400-500 yuan/ton
Entering September, due to the impact of the "Golden September and Silver October", the downstream consumption peak season saw an increase in enterprise production. Many domestic chlor alkali enterprises reduced their burden and underwent maintenance, resulting in a low industry start-up rate of 78%. The supply of liquid chlorine in the market was relatively scarce, and the price of liquid chlorine slightly increased. In late October, due to insufficient follow-up of downstream demand, cost support was weak, procurement prices were lowered, supply and demand were bearish on the market, and the liquid chlorine market maintained a weak consolidation.
In November, some maintenance enterprises in certain areas resumed production. As winter entered, there were fewer equipment shutdowns and maintenance in the northern main production areas, which negatively affected the supply side of the market. The liquid chlorine market had sufficient supply of goods, and downstream production of liquid chlorine was still possible. The demand for liquid chlorine increased, and the on-site mentality was positive. The inventory pressure of enterprises was relatively low, and the price of liquid chlorine remained around 500 yuan/ton. Overall, the liquid chlorine market fluctuates back and forth between the positive support of reducing negative demand and improving downstream demand, and the negative impact of downstream production cuts and price pressures.
3、 Prediction of future market for liquid chlorine
1、 Structural analysis of downstream consumption of liquid chlorine
Liquid chlorine mainly downstream: PVC, chloroacetic acid, phosphorus trichloride, methane chloride, epichlorohydrin, epichlorohydrin, TDI, MDI, chlorinated paraffin, bromine, etc. The consumption of PVC accounts for almost half of the downstream consumption of liquid chlorine, and the market trend and operating conditions of PVC seriously affect the trend of liquid chlorine.
2、 The price trend of domestic liquid chlorine from 2020 to 2023
In 2020, the price of liquid chlorine fluctuated and rose. With the continuous increase in downstream demand for liquid chlorine, production, import, and export gradually increased, and consumption steadily increased year by year. In the fourth quarter of 2021, it performed well, mainly due to the maintenance of some chlor alkali enterprises in the main production areas, low production, reduced supply, favorable market conditions on the supply side, high downstream procurement enthusiasm, and active market transactions, reaching a peak of 4000 yuan/ton, From January to the end of 2022, the domestic liquid chlorine market fluctuated and declined, making it difficult for the demand side to achieve sustained improvement. The game between supply and demand on the market was the main factor, and prices were weakly adjusted. According to Jinlianchuang's statistics, the average price of liquid chlorine in North China from January to November 2023 was 138 yuan/ton, and the average price in 2022 was 377 yuan/ton. According to comparative data, the annual average price of liquid chlorine in North China in 2023 has decreased by 239 yuan/ton compared to 2022, with a decrease of 63.39%. The highest point in the North China market in September 2023 was 850 yuan/ton, and the lowest point occurred in January, with a freight subsidy of 575 yuan/ton.
In 2023, the domestic liquid chlorine market showed an N-shaped trend, with a weak consolidation in January. The operation of chlor alkali plants has been narrowly reduced, and the supply side has limited support for the liquid chlorine market. During the Spring Festival holiday, transportation conditions are inconvenient, and inventory pressure on enterprises is obvious. Downstream demand is weak, and the market trading atmosphere is average. The market price maintains a subsidy of about 500 yuan/ton. In February, downstream operation has been adjusted, and downstream demand has improved. Downstream stocking mentality is slightly positive, and the market price of liquid chlorine has turned negative to positive, At present, the factory price of liquid chlorine for tank trucks in North China has increased to around 300-400 yuan/ton. In March, chlor alkali enterprises entered the seasonal maintenance peak season, with a favorable supply side market. Downstream demand increased, market trading was active, downstream demand improved, enterprise shipments were smooth, and prices were adjusted to be strong. The highest ex factory price of liquid chlorine for tank trucks in North China was around 750 yuan/ton. At the end of the month, downstream industries lowered negative prices, and liquid chlorine prices subsequently declined.
In April, the Qingming holiday was favorable, with some chlor alkali enterprises undergoing equipment maintenance or reducing load, resulting in a decrease in liquid chlorine production. Some regions had a positive attitude towards stocking up, resulting in smooth shipments and decent profit levels for enterprises; Later, due to weak downstream cost support, the main chlorine consuming enterprises engaged in load reduction operations, slowing down their procurement enthusiasm and lowering the purchase price of liquid chlorine. As a result, the price of liquid chlorine fell back to subsidized prices; In May, the maintenance equipment of chlor alkali enterprises gradually resumed, and downstream demand continued to be weak. The market transaction situation was not ideal, and the main downstream PVC industry had poor profits. There were negative operations, and the purchase of liquid chlorine was mainly in demand. Market trading was weak, and operators still held a wait-and-see attitude, with a monthly average price of around -300 yuan/ton. In June, the price of liquid alkali continued to be low, which was relatively favorable for the liquid chlorine market. In order to maintain profits, chlor alkali enterprises sold liquid chlorine at a high price, and the market price of liquid chlorine turned negative to positive.
From July to August, the domestic liquid chlorine market fluctuated upwards. The start-up of chlor alkali plants has been lowered, and there are more maintenance enterprises in the main production area, resulting in a decrease in liquid chlorine production. The supply side is favorable to the market, and downstream stocking mentality is strong. They are actively purchasing liquid chlorine, and demand is active. The pressure on enterprise shipments is not high, and market prices have increased compared to the previous period. The factory price of liquid chlorine for tank trucks in North China is reported to be around 400-500 yuan/ton
Entering September, due to the impact of the "Golden September and Silver October", the downstream consumption peak season saw an increase in enterprise production. Many domestic chlor alkali enterprises reduced their burden and underwent maintenance, resulting in a low industry start-up rate of 78%. The supply of liquid chlorine in the market was relatively scarce, and the price of liquid chlorine slightly increased. In late October, due to insufficient follow-up of downstream demand, cost support was weak, procurement prices were lowered, supply and demand were bearish on the market, and the liquid chlorine market maintained a weak consolidation.
In November, some maintenance enterprises in certain areas resumed production. As winter entered, there were fewer equipment shutdowns and maintenance in the northern main production areas, which negatively affected the supply side of the market. The liquid chlorine market had sufficient supply of goods, and downstream production of liquid chlorine was still possible. The demand for liquid chlorine increased, and the on-site mentality was positive. The inventory pressure of enterprises was relatively low, and the price of liquid chlorine remained around 500 yuan/ton. Overall, the liquid chlorine market fluctuates back and forth between the positive support of reducing negative demand and improving downstream demand, and the negative impact of downstream production cuts and price pressures.
3、 Prediction of future market for liquid chlorine
It is expected that the domestic liquid chlorine market will experience narrow fluctuations in the short term. From the supply side perspective, there are fewer maintenance enterprises in the main production areas, and the production of liquid chlorine has increased. The inventory pressure of enterprises is not high, and downstream demand is active. The stocking mentality is relatively positive, and enterprise shipments are smooth. Overall, the liquid chlorine market is experiencing narrow fluctuations, and it is necessary to closely monitor the operating situation of chlor alkali enterprises and changes in downstream demand.
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