Broadly speaking, the chlor-alkali industry involves making caustic soda, chlorine and hydrogen from electricity and crude salt and then processing them into different chemical products. The chlor-alkali industry is one of the basic inorganic chemical industries and an integral part of the modern chemical industry. The chlor-alkali industry and relevant products affect people's everyday life and is involved in many aspects of the national economy and people's livelihood. Apart from the chemical industry itself, products of the chlor-alkali industry, primarily caustic soda, chlorine and hydrogen, are also widely used in medical, metallurgy, electricity, textile, military, construction material and food processing industries, which consume thousands of chlorine or soda products. The development of the chlor-alkali industry can reflect the economic development of a country.
In 2016, the prices of caustic soda, PVC and soda ash in the chlor-alkali industry all picked up after years of downturn, demonstrating that the industry began to recover. In 2016, prices of liquid caustic soda in some places hit record highs. In Shandong, the prices of 32% ion soda once reached a record high of 900-950 CNY/ton and the prices in Jiangsu rose to 1,030-1,100 CNY/ton, increasing by 90%-100% from the low in 2015. In 2016, the average price of PVC produced by calcium carbide method was over 5,700 CNY/ton, increasing by more than 8% over 2015. In 2016, the average price of PVC produced by ethylene method was 6,100 CNY/ton, increasing by over 5%. The price of soda ash in the second half of 2016 also surged.
In 2016, the overcapacity in the chlor-alkali industry was reduced after years of upgrading of industry structures and the stimulation of environmental protection supervision. By the end of 2016, production capacity of caustic soda reached 39.47 million tons and the production volume was estimated to have exceeded 32.5 million tons. Total production capacity of PVC was 22.57 million tons, among which 18.94 million tons were produced by calcium carbide method, accounting for 83.2%. From 2015 to 2016, the production capacity of soda ash kept declining by 1.4% YOY to 29.7 million tons in 2016. While the production capacity was declining, the utilization rate of the production capacity of soda ash devices improved. The operation rate of soda ash devices was over 80% in 2016.
Downstream demand in the chlor-alkali industry also increased, especially in the alumina and chemical fiber (mucilage glue) industries with greatly increased prices and fairly high operation rate. For example, the average operation rate of the alumina industry in the second half of 2016 was 85-87% and that of the chemical fiber (mucilage glue) industry was above 90%. PVC export market was another highlight. Export soared in Q2 and Q3 and domestic demand for PVC also increased. Calcium carbide mainly depends on domestic demand. PVC still demand for the largest part of calcium carbide, but the shares of vinyl acetate and BDO have also risen. Downstream products of soda ash are mainly glass, including flat glass and daily glass. The demand of flat glass for soda ash has been increasing while the consumption of alumina and synthetic detergent has been declining.
It is expected that in the next few years, the production capacity of the chlor-alkali industry in China will rise, driven by downstream demand.
CRI selects 18 chlor-alkali companies listed in China in this report. The report provides readers with a quick guide to the profiles and financials of Chinese chlor-alkali companies being listed in the recent 10 years.
The report is composed of two parts: the first part is enterprise profiles and the second part is the operation status of these enterprises in the recent decade (presently 2006 to 2016, we will update it to the latest as time goes by).
The operation status is demonstrated from the following perspectives: (1)financial indexes, such as earnings per share, book value per share (BPS), sales per share, net cash flow per share, return on net worth and debt to asset ratio; (2) indexes on the income statement, such as revenue, operating profit, net profit and EBIT; (3) indexes on the income statement, such as revenue, operating profit, net profit and EBIT; (4) indexes on the balance sheet, such as liquid asset, fixed asset, current liability, non-current liability, capital reserve and shareholders' equity.
Companies in the report:
1 Inner Mongolia Junzheng Energy & Chemical Group Co., Ltd. (601216.SH)
2 Xinjiang Zhongtai Chemical Co., Ltd. (002092.SZ)
3 Shanghai Chlor-Alkali Chemical Co., Ltd. (600618.SH)
4 Ningxia Younglight Chemicals Co., Ltd. (000635.SZ)
5 Xinjiang Tianye (Group) Co., Ltd. (600075.SH)
6 Jiang Su Jingshen Salt & Chemical Industry Co., Ltd. (603299.SH)
7 HeBei Jinniu Chemical Industry Co., Ltd. (600722.SH)
8 Sichuan Jinlu Group Co., Ltd. (000510.SZ)
9 Yibin Tianyuan Group Co., Ltd. (002386.SZ)
10 Taiyuan Chemical Industry Co., Ltd. (600281.SH)
11 Baotou Tomorrow Technology Co., Ltd. (600091.SH)
12 Nanning Chemical Industry Co., Ltd. (600301.SH)
13 Sichuan Hebang Biotechnology Co., Ltd (603077.SH)
14 Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH)
15 Inner Mongolia Yuan Xing Energy Company Limited (000683.SZ)
16 Shandong Haihua Company Limited (000822.SZ)
17 Hubei Shuanghuan Science And Technology Stock Co., Ltd. (000707.SZ)
18 Dahua Group Dalian Chemical Industry Co., Ltd. (900951.SH)