China Chemical Industry News: Rising demand in the chlor-alkali industry benefits from favorable conditions
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In the face of this year’s complex market conditions and trends in industrial transformation, the competitive landscape in the chlor-alkali industry remains unchanged. However, driven by developments in the new energy sector, ongoing demand for traditional products, and favorable policies, this industry may encounter new opportunities for growth. “In the first half of the year, China’s consumption of caustic soda was 20.843 million tons, a decrease of 100,000 tons compared to the same period in 2024. As the main downstream product of caustic soda, the production capacity and operating levels of alumina have a significant impact on the caustic soda market. Although a large amount of new alumina production capacity came online in the first half of the year, fierce market competition led to a decrease in the operating rates of alumina manufacturers, resulting in a reduced expected demand for caustic soda. The alkali consumption in other downstream sectors, including those related to new energy, viscose staple fibers, and printing and dyeing, shows no significant changes. ”A relevant official from the Henan Province Petroleum and Chemical Industry Association said that, with a series of favorable policies for the downstream sectors of the chlor-alkali industry introduced at the **level, the future development of this industry remains promising. The competitive landscape will remain unchanged. According to incomplete statistics, chlorine-alkali production capacity is set to continue growing in 2025, with plans to add new production capacity for both caustic soda and polyvinyl chloride (PVC). It is estimated that the effective production capacity of caustic soda in 2025 could reach 52.23 million tons (annual capacity, the same hereafter). PVC production is scheduled to increase by 1.8 million tons throughout the year, bringing the overall capacity to 30.32 million tons by the end of the year. Regionally, the expansion of caustic soda production in 2025 will be concentrated in East China, North China, Central China, and Northwest China. Zhejiang Jiahua Group, Wanhua Chemical (Ningbo) Chlor-Alkali, Hebei Jicheng New Materials, Tianjin Bohua, Hubei Gehua Huaxiang, Shaanxi Beiyuan Chemical Group, Gansu Yaowang Chemical, and others all have plans to increase their production capacity. According to officials from the Henan Province Petroleum and Chemical Industry Association, the domestic chlor-alkali industry shows certain patterns of concentration; regions such as Shandong and Inner Mongolia have developed large-scale industrial clusters thanks to their advantages in resources and energy. Chlor-alkali enterprises in different regions vary in terms of scale, technical level, and product structure. Large enterprises enjoy an advantageous position in market competition thanks to their advantages in capital, technology, and scale, while some small and medium-sized enterprises face challenges such as cost control and technological innovation. Under this regional clustering pattern, coupled with a slowdown in downstream demand growth, the future release of excess production capacity and its transmission to the downstream sector may still lead to a mismatch between supply and demand, thereby intensifying competition within the industry.
The new energy sector continues to drive growth. According to industry insiders, the rapid development of the new energy industry has brought new market opportunities to the chlor-alkali industry. Cui Huajie, the person in charge of operations at Henan Ruiyuan New Energy Chemicals, said that the increasing demand for double-sided solar panels has boosted consumption in the glass industry, thereby raising the demand for caustic soda and chlorine. Chlorine is used to purify silicon wafers and improve the transparency of glass, while caustic soda is used to neutralize acidic waste and enhance surface smoothness. By 2028, dual-sided solar panel modules are expected to account for 61% of global solar panel installations. The development of wind energy infrastructure is also contributing to an increase in the demand for chlor-alkali products, as both turbine coatings and adhesives require these materials. As global wind power capacity continues to grow, it is expected that demand for chlor-alkali products driven by this trend will increase significantly by 2030. Industry experts believe that in fields such as photovoltaics and wind power, the demand for chlor-alkali products is on the rise. Companies that can seize this trend and actively expand their operations in the new energy sector will be able to find new sources of profit growth. Stable demand in traditional industries Wang Xiaodang, deputy general manager of Henan Lianchuang Chemical, said that although demand in the construction industry is weak at present, PVC remains a preferred material for many infrastructure and end-product applications, and thus there is still a stable demand for it in areas such as construction pipes and door and window profiles. With the adjustment of real estate market policies and their gradual stabilization, demand for PVC is expected to receive some support. The alumina industry is one of the main consumption sectors for caustic soda, accounting for approximately 31% of the total demand in 2023. In 2025, a significant amount of new alumina production capacity will come online, with an estimated output of around 13.3 million tons; part of this capacity will result from the replacement of capacity from projects that have been relocated or upgraded. The concentrated introduction of new alumina production capacity will boost the demand for caustic soda in the upstream sector, becoming one of the key factors affecting the supply and demand dynamics in the caustic soda market. Although the operating rate of the alumina industry was below expectations in the first half of the year, it is expected to increase in the second half, and demand growth is likely to materialize gradually, as evidenced by the moderate recovery in the caustic soda market in July. According to data from Longzhong Information, the operating rate of viscose staple fibers, a representative industry in the non-aluminum sector, was 83.4% in the first half of 2025, an increase of 1.6 percentage points compared to the previous year ； Production in the first half of the year was 2.14 million tons, showing continued growth on a year-on-year basis, which provides ongoing support for the demand for caustic soda. Favorable policies boost the market outlook
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