Newsletter summary

Recently, the soda ash market fluctuated due to supply-side maintenance, and prices rebounded from the end of March to early April. Production capacity expanded rapidly from 2023 to 2024, with an increase of about 10 per cent, and the new production plant will continue to boost production. Despite the high inventory, there is limited downward space for prices near the cost line. The number of maintenance increased in the first quarter compared with the same period last year, so we should pay attention to the impact on the follow-up routine maintenance season. The demand side is stable, the daily melting volume of float glass industry remains high, and the demand for photovoltaic glass is growing. In the short term, the demand for replenishment in the lower reaches before the May Day holiday may increase. Long-term demand has increased steadily, the market is mainly wait-and-see.

Text of news flash

Recently, the soda ash market is affected by the maintenance of the supply side, and the price shows a fluctuating trend.

From the end of March to early April, market sentiment was boosted and prices rebounded due to the overhaul of some soda ash units. However, with the end of the maintenance, supply-side production is expected to increase, downstream replenishment tends to be cautious, prices may fall slightly.

From 2023 to 2024, soda ash production capacity expanded rapidly. Production capacity will grow by more than 20% in 2023, and production will grow by about 10%. In 2024, the new production units include Yuanxing No. 4 Line, Lianyungang Alkali Industry and Jiangsu Debang, etc., and the output is expected to continue to increase.

From a seasonal point of view, the soda ash industry in the first and fourth quarters is the high start period, the second quarter maintenance gradually increased, the output at the beginning of the third quarter usually reached the lowest of the year. The number of maintenance increased in the first quarter of this year compared with the same period last year, and the impact on the follow-up routine maintenance season needs continuous attention.

From the analysis of the profit end of the enterprise, the price of raw salt and coal leads to the production cost of soda ash (ammonia-alkali process) is about 1700 yuan. Although inventories are high, there is limited room for downside when prices fall near the cost line. The background of state-owned enterprises and past profitability make it difficult for enterprises to reduce production on a large scale in the short term.

China is a net exporter of soda ash, with an annual export of about 1.5 million tons. Exports in 2023 were about 1.49 million tons, down 27% from the same period last year.Luckycasino777.5%; imports are about 680000 tons, an increase of 500% over the same period last year. Imports increased sharply from January to February of 2024 compared with the same period last year and are expected to remain high in March. However, as prices fall, imports may decline in the second quarter, and exports are likely to increase in the second half of the year.

The demand for soda ash is relatively stable, the daily melting volume of float glass industry remains high, and the demand for photovoltaic glass is growing. At present, the total daily melting volume is about 280000 tons, and the weekly consumption of heavy alkali is about 390000 tons, and that of light alkali is about 25-270000 tons. In the short term, the demand for replenishment in the lower reaches before the May Day holiday may increase. In the long run, the demand side is steadily increasing.

The accumulation of soda ash slows down in the short term. January inventory is not high, after the Spring Festival downstream replenishment, the alkali factory to the warehouse. The inventory of alkali plant increased in February, but at the end of March and the beginning of April, the market sentiment improved, the downstream goods increased, and the inventory began to disappear. Inventory is expected to fluctuate little before May Day.

To sum up, the fluctuation of soda ash market is mainly affected by the supply side. Although the inventory is high, it is mainly concentrated in the hands of a small number of manufacturers. When the maintenance season comes, changes in the supply side may stimulate downstream buying sentiment. At present, the market wait-and-see, if the price falls near the cost line, the maintenance season may rebound to a certain extent. However, the downstream inventory is relatively high, so it is necessary to reduce the expectation of the soda market.

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