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The price of the soda ash disk is basically repaired, but there is still space on the drive
2023/8/9
In the first ten days of July this year, with the gradual fulfillment of terminal rigid demand replenishment and summer maintenance, the market started to rebound and rebound under the continuous supply and demand gap, and the spot price rose accordingly. The SA2308 and SA2309 contracts both rose to the spot price. The tense situation continues.
Since the launch of soda ash varieties, due to their high degree of standardization and good spot circulation, the market participation has continued to increase. Combined with the drive of photovoltaic glass incremental tuyere and supply-side capacity structure changes, it has attracted active participation from all parties in the market, and also Accelerate the integration of futures and spot products, and strengthen the financial attributes of spot products. This round of rebound stems from the correction of the previous panic and decline, or the current price trend is a verification of the strength of market supply and demand fundamentals.
We believe that in the decline from April to May and the current round of rise, the long-short drive of the market operation can be divided into two parts: the actual end that is happening and the expected end with high certainty. In the previous round of downtrends, the actual end-driver reduced purchases in the mid-term and the current linkage decline. In order to obtain orders and cash in profits, the soda factory continued to actively lower prices to make profit. The expectation side is driven by the reduction in the summer maintenance season, and the shortage of supply and demand drives the spot tightness. The certainty of this expectation is relatively high. In this round of rising market, the implementation of summer maintenance has brought the gap between supply and demand to the real end, and the resumption of terminal purchases and the stabilization of spot prices have formed positive feedback. At the same time, the high-certainty anticipation drive is that Alxa’s new production capacity continues to increase in volume and increase production, and its possible negative impact on supply and demand and sentiment is also the core logic held by the bears. Both rounds of the market chose the real-end driver as the decisive factor for the market direction, that is, based on the price strategy direction of upstream manufacturers, and at the same time abandoned the highly certain anticipation-side logic within the stage.
In the course of the decline, according to the continuous decline in prices and the guidance of market discounts, the purchase willingness of the terminal fell to the bottom, and some upstream manufacturers used the number of days of orders as the anchor to formulate price strategies, which facilitated the smooth operation of the negative feedback path of the decline.
At the point of change in the supply-side structure, both the upstream pricing strategy and the terminal procurement strategy have distinct "passive" characteristics.
In the development path of the supply-demand structure from staged tightness to oversupply in the later stage, the terminal suppresses purchases within the scope of safe raw material stocks as much as possible, and the upstream hopes to obtain orders with a longer cycle to lock in profits, that is, the willingness of upstream and downstream to "hold goods" Weak. At this time, the purchase of terminals is more reserved than usual, and even in the situation of tight supply and demand, the upstream price increase is relatively conservative. The purchase action of the terminal is defined as a "passive" replenishment after it is difficult to continue to suppress, and the upstream price increase is not as usual to actively set off the rising atmosphere, but a "passive" increase under the full order and tight supply.
Data shows that the market price of heavy soda ash in Shahe, the main sales area, was 1,950 yuan/ton at the end of May, and rose to 2,150 yuan/ton in early August. According to market information feedback, the market delivery price in some regions in August rose to 2,250 yuan/ton. On the one hand, the situation of tight spot supply and demand is still continuing. In addition to the routine maintenance plan, there are reports of sudden load reduction and temporary shutdown of individual devices in the market; Alkali products are about to enter the market, and the second-line feeding production will be imminent. Comparing the two parties, the market price fell into disagreement again after a round of sharp rise.
We believe that the current market trend may still be driven by the movement of spot quotations from alkali plants. According to the calculation of the balance sheet, the most tense node on the spot supply and demand side will appear in the middle and late August to the end of the month, and the specific time will be affected by the temporary problems of the installation and the ramp-up process of new production capacity. With the existence of a gap between supply and demand, the procurement behavior of the terminal is divided into three stages. First, the terminal actively suppresses the purchase according to the price drop expectation; second, it actively replenishes the inventory to a safe level; The current terminal state is mostly in the second stage and the transitional stage between the first and second stage.
In the short term, the current disk price discount has basically recovered, but there is still room for drivers. As mentioned above, because the industry is currently in a special period, it is difficult to locate the spot price simply through the level of inventory pressure, just as it is difficult to find the bottom during the decline from April to May, and it is also difficult to judge the height of the current rebound market through indicators. The way of operation is to follow the driving force and let the market discover the driving value.
Since the launch of soda ash varieties, due to their high degree of standardization and good spot circulation, the market participation has continued to increase. Combined with the drive of photovoltaic glass incremental tuyere and supply-side capacity structure changes, it has attracted active participation from all parties in the market, and also Accelerate the integration of futures and spot products, and strengthen the financial attributes of spot products. This round of rebound stems from the correction of the previous panic and decline, or the current price trend is a verification of the strength of market supply and demand fundamentals.
We believe that in the decline from April to May and the current round of rise, the long-short drive of the market operation can be divided into two parts: the actual end that is happening and the expected end with high certainty. In the previous round of downtrends, the actual end-driver reduced purchases in the mid-term and the current linkage decline. In order to obtain orders and cash in profits, the soda factory continued to actively lower prices to make profit. The expectation side is driven by the reduction in the summer maintenance season, and the shortage of supply and demand drives the spot tightness. The certainty of this expectation is relatively high. In this round of rising market, the implementation of summer maintenance has brought the gap between supply and demand to the real end, and the resumption of terminal purchases and the stabilization of spot prices have formed positive feedback. At the same time, the high-certainty anticipation drive is that Alxa’s new production capacity continues to increase in volume and increase production, and its possible negative impact on supply and demand and sentiment is also the core logic held by the bears. Both rounds of the market chose the real-end driver as the decisive factor for the market direction, that is, based on the price strategy direction of upstream manufacturers, and at the same time abandoned the highly certain anticipation-side logic within the stage.
In the course of the decline, according to the continuous decline in prices and the guidance of market discounts, the purchase willingness of the terminal fell to the bottom, and some upstream manufacturers used the number of days of orders as the anchor to formulate price strategies, which facilitated the smooth operation of the negative feedback path of the decline.
At the point of change in the supply-side structure, both the upstream pricing strategy and the terminal procurement strategy have distinct "passive" characteristics.
In the development path of the supply-demand structure from staged tightness to oversupply in the later stage, the terminal suppresses purchases within the scope of safe raw material stocks as much as possible, and the upstream hopes to obtain orders with a longer cycle to lock in profits, that is, the willingness of upstream and downstream to "hold goods" Weak. At this time, the purchase of terminals is more reserved than usual, and even in the situation of tight supply and demand, the upstream price increase is relatively conservative. The purchase action of the terminal is defined as a "passive" replenishment after it is difficult to continue to suppress, and the upstream price increase is not as usual to actively set off the rising atmosphere, but a "passive" increase under the full order and tight supply.
Data shows that the market price of heavy soda ash in Shahe, the main sales area, was 1,950 yuan/ton at the end of May, and rose to 2,150 yuan/ton in early August. According to market information feedback, the market delivery price in some regions in August rose to 2,250 yuan/ton. On the one hand, the situation of tight spot supply and demand is still continuing. In addition to the routine maintenance plan, there are reports of sudden load reduction and temporary shutdown of individual devices in the market; Alkali products are about to enter the market, and the second-line feeding production will be imminent. Comparing the two parties, the market price fell into disagreement again after a round of sharp rise.
We believe that the current market trend may still be driven by the movement of spot quotations from alkali plants. According to the calculation of the balance sheet, the most tense node on the spot supply and demand side will appear in the middle and late August to the end of the month, and the specific time will be affected by the temporary problems of the installation and the ramp-up process of new production capacity. With the existence of a gap between supply and demand, the procurement behavior of the terminal is divided into three stages. First, the terminal actively suppresses the purchase according to the price drop expectation; second, it actively replenishes the inventory to a safe level; The current terminal state is mostly in the second stage and the transitional stage between the first and second stage.
In the short term, the current disk price discount has basically recovered, but there is still room for drivers. As mentioned above, because the industry is currently in a special period, it is difficult to locate the spot price simply through the level of inventory pressure, just as it is difficult to find the bottom during the decline from April to May, and it is also difficult to judge the height of the current rebound market through indicators. The way of operation is to follow the driving force and let the market discover the driving value.
In terms of strategy, refer to the direction of the spot price as a guideline. In recent months, the contract will be long and short, and the profit will be locked in, leaving some to be driven and continue to ferment. Before the spot price turns, it is expected that the price difference between contracts near delivery will shrink. Both the long-term and intertemporal positive strategy ideas refer to the spot price turn as the termination indicator.
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