Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoint The recent sharp decline in caustic soda futures prices is due to the market returning to fundamentals after the previous export expectations were fulfilled. Currently, the domestic caustic soda market faces high supply and high inventory pressure, and it is expected to maintain a bearish and volatile pattern in the short term [1][9]. 3. Summary by Relevant Catalogs 3.1 Market Performance - On March 30, the main contract of caustic soda futures increased in position and declined, with an intraday decline of 4.39%. Since March 24, caustic soda futures have continued to decline, giving back the previous gains [1]. 3.2 Driving Factors - **Export Expectation Fulfillment**: In March, the caustic soda futures price first declined slightly and then rose sharply, mainly driven by the sudden geopolitical situation in the Middle East, which led to a sharp increase in export orders for 50% high - concentration liquid caustic soda. However, as the export orders were gradually implemented, the market's expectation of the "export dividend" was fully digested, and the withdrawal of long - position funds led to the sharp decline in prices [3]. - **Supply - Demand Contradiction**: The supply of caustic soda remains loose. As of March 26, the average capacity utilization rate of Chinese caustic soda sample enterprises with a capacity of 100,000 tons and above was 86%, a slight increase of 0.7% month - on - month. The inventory of fixed liquid caustic soda sample enterprises with a capacity of 200,000 tons and above increased by 4.93% month - on - month and 14.28% year - on - year. On the demand side, alumina manufacturers maintained rigid procurement after the festival, and the overall start - up was at a low level in the same period of previous years; non - aluminum downstream demand gradually recovered, but the overall growth rate was slow. The demand improvement was not enough to offset the pressure of high supply and high inventory [4][5][8]. 3.3 Market Outlook - In the short term, the real - world pressure of high supply and high inventory in the domestic market will continue to suppress prices, and caustic soda futures are expected to maintain a bearish and volatile pattern until a new price equilibrium is found. - In the medium to long term, attention should be paid to the maintenance rhythm of chlor - alkali plants and cost support. As the price falls near the cash cost line of some high - cost enterprises, the supply side may experience passive production cuts. At the same time, it is necessary to closely monitor when the inflection point of high - inventory destocking appears and the supporting effect of the cost side on prices [9].