Chlor-alkali: Building a new pattern of \"high-end development + coordination\"

Thread Content

Editor’s Note: In mid-November 2025, the High-Tech Development Conference for the Petroleum and Chemical Industry, along with a conference on upstream supply in the salt chemical sector and downstream applications of the two types of alkalis, was held in Yantai, Shandong. This conference brought together experts and scholars from 10 industry organizations, including the China Salt Industry Association and the Shandong Chlor-alkali Industry Association, to conduct in-depth discussions on how to establish a new ecosystem for the coordinated development of salt chemical supply chains, industrial chains, and innovation chains during the 15th Five-Year Plan period. 　　To systematically present the fruitful outcomes of this conference as well as valuable insights from the industry, this edition has planned and launched a series of reports titled \"Building a New Ecosystem for Collaborative Development in the Salt Chemical Industry.\" The series consists of two articles, each focusing on the challenges related to high-quality development in the chlor-alkali industry and the soda ash industry, as well as the strategies to address these challenges, with the aim of providing useful references and insights for the future development of the industry. 　　As the leading product in the salt chemical industry, how to establish a new pattern of high-quality development for chlor-alkali during the 15th Five-Year Plan period has become a key issue for this industry. At the recently held 2025 High-Tech Development Conference for the Petroleum and Chemical Industry, as well as the Conference on Upstream Supply in the Salt Chemical Industry and Downstream Applications of Alkalis, Song Xiangdong, executive president of the Shandong Chlor-alkali Industry Association, clearly stated that to address issues such as an excess of chlor-alkali production in the north and a shortage in the south, an imbalance between alkalis and chlor-alkali products, and a lack of high-end products, it is necessary to pursue the extension of the industrial chain and the adoption of a circular economy model. Technological innovation and the pursuit of higher-end development should be promoted, with efforts to enhance the integration between technological innovation and the industrial value chain, thereby creating a new pattern characterized by high-end development and coordination. This view resonated widely among the participants. 　　Song Xiangdong also provided an overview of the industry’s operational status: In 2024, there were 172 caustic soda production enterprises in China, with a total production capacity of 50.1 million tons per year (the same unit is used hereafter); of this amount, 1.69 million tons represented new added capacity. In the first half of 2025, the market remained stable overall; new caustic soda production capacity increased by 450,000 tons, and output rose by 4.8% year-on-year to 22.67 million tons ； The second half of the year saw a volatile trend. In terms of downstream demand, the demand from the oxidation industry is relatively strong, while demand from industries such as printing and dyeing sowie the chemical fiber industry is more moderate. 　　The supply and demand in the market remain unbalanced. The caustic soda market in South China is characterized by a shortage of domestic production and reliance on imports; its total production capacity is 2.87 million tons, accounting for 5.69% of the country’s total chlor-alkali production capacity. This relatively limited capacity means that the region relies heavily on supplies from neighboring areas such as the Northwest and North China. 　　The demand for caustic soda in Guangdong region has exceeded 2 million tons, and local production is far from sufficient to meet this demand; therefore, supplies from other regions are needed to support local needs. The consumption of alkali in the traditional ceramics and printing and dyeing industries has declined, while consumption in the lithium battery industry has risen significantly, becoming a new driver for local demand for caustic soda. 　　The total caustic soda production capacity in Guangxi is 1.145 million tons, accounting for 39.90% of the total production in South China. The oxidation industry in this region has the third-largest production capacity in the country, and it represents the largest demand sector for caustic soda in Guangxi. 7.6 million tons of alumina production capacity will come online between 2025 and 2026, resulting in a significant increase in demand for caustic soda. 　　The total caustic soda production capacity in Fujian is 1.44 million tons, accounting for 50.17% of the total capacity in South China. The local supply of caustic soda can meet part of the demand. The demand for caustic soda in industries such as chemicals remains relatively stable, while the rapid development of emerging industries such as new energy and the electronics industry has increased the demand for it. 　　Currently, price transmission between the South China and North China regions is primarily achieved through cross-regional supply flow. By 2025, affected by the overall decline in the prices of liquid caustic in key production and consumption areas such as North China and East China, the price of liquid caustic in South China showed a weakly steady downward trend. 　　On the demand side, the increasing need for caustic soda by enterprises in industries such as printing and dyeing in South China will prompt caustic soda manufacturers in North China to adjust their production plans and increase output to meet market demands. In addition, the growing demand for high-end chlor-alkali products from emerging industries such as new energy and electronic information has prompted chlor-alkali manufacturers in North China to adjust their product portfolios by increasing the production and supply of high-end products such as electronic-grade chemicals and high-purity epoxy resins. 　　In terms of capacity allocation, the increase in the self-sufficiency rate of caustic soda in South China in the future will reduce demand for supplies from North China to some extent. This will force chlor-alkali companies in North China to pay more attention to market segmentation and product differentiation strategies. Manufacturers need to further enhance the research and development as well as production of high-end products in order to cope with the competitive pressure from conventional products resulting from the increased capacity in South China. 　　Systemic challenges remain. The chlor-alkali industry continues to face systemic challenges such as an unbalanced product structure and insufficient coordinated development, increasing market competition pressure, and increasingly stringent environmental regulations. 　　In the past two years, the operating rate of caustic soda production in China has increased, leading to an improved supply; as a result, there is an adequate amount of liquid chlorine available. However, the operating rates of key chlorine-consuming products such as propylene oxide and methyl chlorides remain below 70% for extended periods of time ； Polyvinyl chloride (PVC), as a key chlorine-consuming product, is also facing weak demand; the overall operating rate of chlorine-consuming production facilities is low, which means the problem of \"alkali-chlorine imbalance\" persists. 　　How to further develop downstream products with high chlorine consumption, and to better create a system of high-value, differentiated fine chlorine-consuming products, remains an important challenge for the chlor-alkali industry chain. 　　Regarding the increasing pressure from market competition, as several new projects for the comprehensive utilization of waste salt to produce caustic soda come online one after another, the national capacity for chlor-alkali production is on the rise year by year. This disrupts the balance in the traditional market; the introduction of low-priced products from different provinces leads to inefficient price wars and waste of resources, significantly reducing the profit margins for enterprises. 　　At the same time, the environmental friendliness of the international trade environment has declined. Major economies such as the United States and the European Union are reducing their reliance on chlorine-based products from Asia by adopting the strategy of \"nearshoring.\" The European Union has imposed high anti-dumping duties on tetrachloroethylene, resulting in a significant increase in export costs. With the implementation of the Carbon Border Adjustment Mechanism (CBAM), the export cost per ton of PVC is set to rise by 360–450 euros. Coupled with the 15 additional control criteria introduced by REACH regulations and technical barriers such as Japan’s \"Green Chloride Certification,\" these factors further narrow the international market opportunities for enterprises. 　　Furthermore, as **environmental policies become increasingly stringent, chlor-alkali companies face greater environmental pressures and higher costs associated with technological upgrades. They need to invest more in wastewater treatment, salt sludge disposal, and mercury pollution control, which will further squeeze their profits and lead to a reshuffling of the industry. 　　Building a New Pattern for High-Quality Development Song Xiangdong argues that, in the face of global trends in the chemical industry aimed at reducing costs and increasing efficiency, promoting sustainable development, advancing research and development of high-end chemicals, and enhancing supply chain resilience, the industry must pursue transformation and upgrading through greener, smarter, higher-quality, and more collaborative approaches, in order to accelerate the development of new forms of productive capacity. To this end, he put forward the following four suggestions. 　　First, it is necessary to optimize the market layout in order to achieve a balance between supply and demand. On the one hand, companies need to optimize their market strategy, formulating differentiated product strategies based on the specific market demands of different regions ； At the same time, strengthen industry self-discipline to avoid blind expansion of production capacity and maintain market stability. On the other hand, it is necessary to make full use of the cost and technological advantages of the domestic chlor-alkali industry, actively expand into international markets, increase product exports, and alleviate the sales pressure in the domestic market. 　　Second, in terms of technological innovation, achieve green development. Guided by advanced technologies and cutting-edge innovations in the chlor-alkali industry, it is necessary to improve the entire innovation chain system, facilitate the concentration of innovative elements within the chlor-alkali industry chain, and establish a collaborative innovation system centered on enterprises, driven by the market, and featuring close integration of industry, academia, and research. At the same time, taking \"low-carbonization, circularity, and cleanliness\" as the direction for transformation, efforts are focused on advancing low-carbon production processes, in order to establish a new model of green development that integrates \"energy savings and consumption reduction, hydrogen energy utilization, resource recycling, and carbon emission reduction\", thereby facilitating the transition of the chlor-alkali industry toward near-zero carbon emissions. 　　Third, improve collaborative efficiency while advancing intelligent transformation. Through the deep integration of artificial intelligence technology with enterprise management, continuous improvements are achieved in safety and environmental protection oversight capabilities as well as in the level of coordination across the industrial chain. 　　Fourth, it is necessary to optimize the industrial chain and enhance the value chain. We will explore the full potential of chlorine, work to optimize the structure of downstream products based on chlorine as a raw material, and drive the transformation of the chlor-alkali industry chain from basic chemicals to high-value-added fine chemicals by expanding into areas with high added value and high technical barriers.