There are a large number of futures traders in the industry, and these futures traders mainly earn basis. When the spot premium on the disk is negative, that is, the basis is negative, they can buy a lot of spot from the alkali plant and then throw it on the futures disk to earn money for the return of the basis. Once the basis returns, the profits of their spot positions and short futures orders can support them to sell goods to the market at a cheaper price than soda plants.
Generally speaking, when the basis is negative, it is a good time for them to open positions, and after the basis is positive, it is a good time for them to close their positions and sell their goods to make profits.
Therefore, once the spot premium on the disk is negative and the basis is negative, a large number of current traders will enter the market and move the inventory of the soda plant to the delivery warehouse. From the point of view of soda plant, the demand has increased a lot at once, and the previous backlog of inventory can be quickly removed and converted into working capital, which is equivalent to creating a lot of demand out of thin air.