Slow Pickup in Domestic Production Induced Upward Pressure on Caustic Potash Prices in China

Caustic Potash prices in China after witnessing a continuous fall since past few weeks have finally begun to stabilize on active pickup in demand from the local market. Pricing of Caustic Potash has been tracing a downward trajectory since January amidst the slowdown in demand from various end-use segments. However, post the lunar holidays, demand has registered a significant revival while the plant operating rates are slowly picking up. The situation has compelled traders to `mark the stock at a higher price to maximize their profit margins.

As per experts, the pickup in demand for Caustic Potash in China has been faster than the expectations. Even though manufacturing in the downstream plants has resumed but plant operating rates are expected to take long to reach normalcy. Inventories were also assessed at low levels, as various chlor-alkali plants remained shut in lieu of winter Olympic curbs and Chinese lunar holidays in the past 1 month. The demand for Caustic Potash remained strong from detergents and surfactant segment even during the holiday period. However, it has picked up significantly from the industrial operations post the lunar holiday period.

Caustic Potash prices in China witnessed a rise by 4% in the last two weeks. As per ChemAnalyst, “Caustic Potash prices are likely to continue tracing an upward trajectory until the plant operating rates reach normalcy. Besides, favourable demand sentiments are expected keep the buying activities strong till late-March. Caustic Potash prices are anticipated to stabilize by early April amidst ease in the availability of the product.”