** Market rebound is favorable in the short term

As reports indicate, following the adjustment period in November, China's ** market experienced a notable rebound. Prices surged, signaling a positive short-term outlook. Industry insiders suggest that the market is set for a brief yet favorable rally. First, a sharp recovery in prices was observed after a month-long downturn. Domestic enterprise averages climbed from approximately 433 yuan/ton earlier this month to around 570 yuan/ton by month-end. This represents a seven-day increase of 31.54%, with the current year-over-year growth standing at 22.14%. "With low price levels over time, ** has strong upward momentum," noted Zhou Yu, an analyst from the Social Chlorine Industry. "Due to transportation restrictions and low operational rates among downstream firms, ** prices had previously stagnated between 200-250 yuan/ton. However, as demand picked up with improved downstream operations and reduced production loads for major Shandong-based chlor-alkali enterprises, prices naturally rose." Regional pricing disparities exist in China. Shandong, a key chlor-alkali producing province, now quotes ** at 600-650 yuan/ton, more than doubling from the previous period. Second, the price increase faces limitations. Zhongyu Information Analyst An Kang mentioned that the downstream ** market primarily serves sectors like PVC, ethylene, calcium carbide, and propylene oxide. These industries often involve high energy consumption and pollution. Although energy-saving measures have ended and markets are heating up, operational rates remain below full capacity. This limits upward price movement. ** products carry a basic cost exceeding 1,000 yuan/ton, leaving many firms incurring losses. Given the chlor-alkali industry's reliance on alkali product profits, large enterprises sell chlorine products at near-cost prices. Downstream resistance to further price hikes suggests a narrow-range consolidation in the short to medium term. Third, listed companies may see short-term gains. Ankang noted that the current price rebound offers some domestic listed companies a positive outlook. Certain large firms might leverage this momentum for strategic advantage. Xiang Han Securities Investment Advisor Zhang Hanshi pointed out that the market is undergoing systemic risk adjustments. While individual stock performances remain weak, stabilization could lead to interest from funds seeking chemical stocks. Investors should consider late-stage attention to relevant companies like Lubei Chemical, Chlor-Alkali Chemicals, Nanhua Chemicals, Shenyang Chemicals, and Binhua Chemical Co., Ltd., which have exposure to ** production. Some varieties may exhibit active trading opportunities. Despite the rebound, market dynamics remain complex, with both opportunities and challenges ahead.