Report Industry Investment Rating - Not provided in the content Core Views - The strong price of liquid chlorine supports the high operation rate of chlor - alkali enterprises, while the caustic soda price is under downward pressure. Since the beginning of 2026, the domestic caustic soda market has continued to weaken, with significant declines in both futures and spot prices. The driving factors for the decline include the sharp rise in liquid chlorine prices, high inventory, and weak demand [2]. - Although the caustic soda price has fallen, due to the rich profits from liquid chlorine, the overall gross profit of chlor - alkali enterprises remains positive (about 154 yuan/ton), and they have insufficient willingness to cut production actively. Without large - scale production cuts, the price is expected to continue to be under pressure. The futures price is expected to continue to fall until the disk profit reaches 0. The SH2603 reference operating range is 1750 - 2100 yuan/ton [3]. Summary by Directory 1. Caustic Soda Market Review - Since the beginning of 2026, the futures and spot prices of caustic soda have been under continuous pressure. As of January 23, the 32% liquid caustic soda converted to 100% price dropped from 2197 yuan/ton at the beginning of the year to 1944 yuan/ton, and the caustic soda 2603 contract dropped from 2241 yuan/ton to 1936 yuan/ton. The sharp rise in liquid chlorine prices is the main core contradiction, and the inventory is at the highest level in the past five years, leading to a collapse - like decline in futures and spot prices [4]. - The current market is similar to that from March to May 2025. The strong seasonal demand for liquid chlorine has pushed up its price. Although the liquid caustic soda price has continued to decline, chlor - alkali plants still maintain profitability. On the demand side, alumina enterprises' profits are under pressure, and it is the off - season for non - aluminum demand. The mismatch between supply and demand has led to continuous inventory accumulation and falling prices [4]. - As of January 23, the liquid chlorine price has risen from 150 yuan/ton at the beginning of the year to 350 yuan/ton. The reason is that on January 9, the Ministry of Finance and the State Administration of Taxation announced that the export tax rebates for three major categories of PVC products would be cancelled from April 1. After the policy was announced, the domestic PVC industry entered a "rush - to - export" cycle, increasing the demand for liquid chlorine. As of January 23, the average gross profit of Shandong chlor - alkali plants corresponding to the caustic soda 2603 disk price is still 154 yuan/ton [4]. - As of January 23, the latest weekly production reached 86.3 tons, a new high. With the maintenance of gross profit and the release of new production lines, production has been rising steadily. The spot price is expected to continue to be under pressure before large - scale production cuts. The latest national weekly inventory of liquid caustic soda reached 50.96 tons, still at a five - year high [5]. 2. Market Outlook - On the supply side, production continues to rise, and it is necessary to observe whether there will be production cuts due to profit contraction. On the demand side, alumina prices are continuously falling, and most alumina producers are facing losses. The expectations of production cuts and delayed production are increasing, and the non - aluminum peak season is coming to an end. The demand for caustic soda is expected to be under pressure in the short term [21]. - By reviewing the market from March to May last year, the futures price is expected to continue to fall until the disk profit reaches 0. Attention should be paid to the persistence of liquid chlorine prices and the "rush - to - export" of PVC. The upward range of liquid chlorine prices determines the lower limit of the current liquid caustic soda price. The SH2603 reference operating range is 1750 - 2100 yuan/ton. It is necessary to continuously track liquid chlorine prices, chlor - alkali plant gross profits, caustic soda production, and the alkali - stocking rhythm of alumina enterprises [21].