Core Viewpoint - The caustic soda futures market is experiencing significant downward pressure due to high supply, high inventory, and weak demand, leading to prices hitting new lows since listing [5][34]. Supply Side - Supply surplus is the fundamental driver of the current price decline, with the domestic caustic soda industry operating at high capacity. As of January 23, the weekly operating rate reached 87.7%, an increase of 1 percentage point, with weekly production rising to 863,000 tons [9][27]. - The total domestic caustic soda capacity is projected to reach approximately 52.23 million tons per year by 2025, with an additional 2.56 million tons planned for 2026. Despite expectations for potential production cuts, no large-scale reductions have been observed as of the end of January [9][27]. Demand Side - Demand is weak, particularly in the alumina sector, which consumes over 60% of caustic soda. The overall operating rate in the domestic alumina industry was 85.18%, down 0.65% from the previous period, indicating cautious purchasing behavior [12][30]. - Other sectors such as viscose staple fiber, paper, and dyeing chemicals show limited demand growth, further contributing to the overall weakness in the caustic soda market [12][30]. Inventory - Domestic liquid caustic soda inventories have reached record highs, with major enterprises maintaining stocks above 450,000 tons. As of January 23, inventories stood at 509,600 tons, an increase of 67,400 tons from the end of December [14][32]. - High inventory levels continue to suppress the potential for price rebounds, with the need for inventory reduction becoming increasingly pressing [14][32]. Summary - The caustic soda futures market is characterized by a downward trend, with prices breaking new lows and current prices approaching or even breaching production cost lines in some regions. The core issues are high supply, high inventory, and weak demand, which are expected to persist in the short term [16][34]. - The market is likely to remain in a low-price oscillation pattern, with potential for short-term support from downstream replenishment needs post-Chinese New Year. However, any rebound will face significant challenges until there is a substantial improvement in the supply-demand balance [34][35].

Report Summary 1. Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoint - During the week of September 15 - 19, 2025, the caustic soda futures price stopped falling and rebounded, with a weekly increase of 3.16%. Next week, as the maintenance devices gradually resume operation, the operating rate is expected to rise [1]. 3. Summary by Directory 3.1 Futures Market - **Contract Price**: The caustic soda futures price rebounded this week. As of Friday's close, the main contract caustic soda 2601 (SH101) rose 81 yuan/ton to 2641 yuan/ton, a 3.16% increase. The highest price was 2657 yuan/ton, the lowest was 2548 yuan/ton, and the open interest was 114,000 lots, a decrease of 4,712 lots from last week. The trading volume increased by 316,000 lots to 1.852 million lots [2]. - **Variety Market**: Except for the near - month SH510 contract, which declined, other caustic soda futures contracts generally rose this week, and the open interest of the main contract SH601 decreased [4]. - **Related Market**: The trading volume of caustic soda 01 contract options increased compared to last week, with call options performing stronger than put options. The strike prices of call options with large trading volumes were mostly concentrated in the 2680 - 3040 point range, and put options were concentrated in the 2320 - 2680 point range [6]. 3.2 Spot Market - **Spot Market Conditions**: According to Shanghai Steel Union data, the price of 32% ion - exchange membrane liquid caustic soda in Shandong dropped 70 yuan/ton to 800 yuan/ton, a decline of 8.05%. The price of liquid caustic soda in Jiangsu remained at 940 yuan/ton [8]. - **Basis Data**: This week, the caustic soda futures price rebounded while the spot price declined, and the basis turned negative, reaching - 141 yuan/ton as of Friday [8]. 3.3 Influencing Factors - **Latest News**: As of September 18, 2025, the average capacity utilization rate of Chinese caustic soda sample enterprises with a capacity of 200,000 tons and above was 81.9%, a 1.5% decrease from last week. The inventory of fixed liquid caustic soda sample enterprises was 378,300 tons (wet tons), a 6.02% increase from last week and an 18.22% increase year - on - year. The national liquid caustic soda sample enterprise storage capacity ratio was 20.15%, a 0.75% increase from last week [10]. - **Technical Analysis**: This week, the daily price of the main caustic soda contract SH601 gradually increased, and the trading volume increased compared to last week [12]. 3.4 Market Outlook - This week, the caustic soda futures price strengthened, and the open interest of the main contract decreased. The alumina operating rate remained at 84.0%. The non - aluminum demand showed that the capacity utilization rate of viscose staple fiber was 89.52%, a 1.75% increase from last week, and the printing and dyeing operating rate in the Jiangsu and Zhejiang regions was 65.76%, the same as last week. Next week, as the previously maintained devices resume operation, the supply is expected to increase. Considering the high inventory and sufficient supply in Shandong before the National Day holiday, the spot price may continue to be weak. Future market trends need to focus on the purchasing volume of the main downstream and device fluctuations [14].