23
The excess demand for soda ash in the photovoltaic glass industry will decrease
2023/8/23
1、 Analysis of soda ash supply in the second half of the year
In the second half of 2023, the new production capacity of soda ash will be around 8 million tons, nearly 25% of the total production capacity in China. Specifically, the expansion of the 200000 ton pure alkali plant in Anhui Hongsifang, the 5 million ton natural alkali project in Yuanxing Energy Phase 1, the relocation of the 600000 ton plant in Jiangsu Debang, the upgrading and renovation of the 200000 ton plant in Chongqing Xiangyu Salt Chemical, and the expansion of the 2 million ton plant in Henan Jinshan Chemical. If the production capacity of the above-mentioned manufacturers is put into operation on time, the pure alkali production capacity will reach a new high in 2023. The original supply and demand pattern in the market will be disrupted.
The concentrated investment of new production capacity will have a significant impact on the supply side of the market in the short term, manifested as a significant increase in market supply and a decline in market prices. Alkali enterprises are gradually transforming their sales models, increasing market development, and expanding their sales channels. On the downstream demand side, regular inventory may be reduced, and the procurement plan for soda ash may be adjusted in a timely manner. In addition, alkali enterprises and downstream enterprises will also strengthen the use of futures tools to better manage operational risks.
2、 Can the increase in soda ash production capacity become the norm
In the second half of 2023, the new production capacity of soda ash will be around 8 million tons, nearly 25% of the total production capacity in China. With the continuous implementation of China's dual carbon target policy and the continuous improvement of natural alkali extraction technology, the proportion of natural alkali production process will continue to rise.
Although natural alkali process enterprises have significant advantages in terms of cost and environmental protection, there is significant competitive pressure on manufacturers of ammonia alkali process and combined alkali process in the market. But the disadvantage of natural alkali method is that it is subject to the geographical location and supply of resources, and it is basically impossible to increase the production capacity of natural alkali method as a normal state.
Due to the large discharge of waste liquid and residue, ammonia alkali process enterprises are not suitable for the current basic policies of China in terms of environmental protection. In the future, it is not only difficult to obtain approval for new production capacity, but also may gradually withdraw from the market due to issues such as high energy consumption, high pollution, and high emissions.
The increase in production capacity of the combined alkali method is subject to strict constraints imposed by the state on the production capacity of the pure alkali industry. At present, the intelligent and intelligent development of domestic alkali enterprises is not advanced enough. In the future, the joint alkali method enterprises may further strengthen technological transformation, strictly control the increase in production capacity, and only replace existing devices with equal or reduced quantities to accelerate the green development of the industry.
From the perspective of medium to long term market development, small and medium-sized production capacity devices mainly using ammonia alkali method and combined alkali method have significant disadvantages in terms of economy and environmental protection. Low efficiency production capacity may accelerate its exit, and industry production capacity may undergo a new round of reshuffle.
3、 What are the incremental changes in demand for soda ash for float glass in the second half of the year
At present, the production of float glass has maintained a certain level of stability, and the cost and profit of glass enterprises are trending towards improvement. The demand for soda ash is strongly maintained. In the first half of the year, the profit margin of glass production was significantly restored, and glass companies' willingness to resume production and ignite increased, while their willingness to undergo cold repairs weakened, resulting in a significant increase in production capacity. According to publicly available statistics, as of the end of June, there were a total of 311 float glass production lines in China, with 246 in production and a daily melting capacity of 168350 tons. From January to June, there were a total of 7 new ignition lines in China, with a daily melting capacity of 6070 tons, 13 production lines resumed, with a daily melting capacity of 8750 tons, 15 cold repair and shutdown lines, and a daily melting capacity of 8560 tons. The net daily melting capacity increased by 6260 tons, and the production capacity increased by nearly 4% in the first half of the year.
The current profit recovery in the glass industry has resulted in a high willingness to resume production and ignite fires in the future. It is understood that there are still many production lines waiting to be ignited and resumed in the third quarter. It is expected that the daily melting capacity of glass will increase to 172000 tons by the end of the third quarter, and the daily melting capacity in the fourth quarter may remain high and fluctuate. It is expected that the increase in glass production capacity in the second half of the year will be 2.5% -3%.
4、 Can photovoltaic glass support the strengthening of soda ash fundamentals in the second half of the year
According to statistics, the total production capacity of photovoltaic glass by the end of 2022 was 84000 tons per day, an increase of over 70% year-on-year. In May 2023, the Ministry of Industry and Information Technology issued a notice on further improving the risk warning of photovoltaic rolled glass production capacity, requiring strict implementation of the production capacity warning system. The background of the introduction of the photovoltaic glass production capacity warning system is mainly due to the rapid expansion of domestic photovoltaic glass production capacity and the obvious trend of oversupply. The implementation of the production capacity warning system has a relatively small impact on the ongoing production lines, but a significant impact on the unfinished production lines; It has a significant impact on economically developed regions and a relatively small impact on the western region. With the strict implementation of production capacity warning systems in various regions, the growth rate of photovoltaic glass supply will gradually slow down in the future.
In the second half of 2023, the new production capacity of soda ash will be around 8 million tons, nearly 25% of the total production capacity in China. Specifically, the expansion of the 200000 ton pure alkali plant in Anhui Hongsifang, the 5 million ton natural alkali project in Yuanxing Energy Phase 1, the relocation of the 600000 ton plant in Jiangsu Debang, the upgrading and renovation of the 200000 ton plant in Chongqing Xiangyu Salt Chemical, and the expansion of the 2 million ton plant in Henan Jinshan Chemical. If the production capacity of the above-mentioned manufacturers is put into operation on time, the pure alkali production capacity will reach a new high in 2023. The original supply and demand pattern in the market will be disrupted.
The concentrated investment of new production capacity will have a significant impact on the supply side of the market in the short term, manifested as a significant increase in market supply and a decline in market prices. Alkali enterprises are gradually transforming their sales models, increasing market development, and expanding their sales channels. On the downstream demand side, regular inventory may be reduced, and the procurement plan for soda ash may be adjusted in a timely manner. In addition, alkali enterprises and downstream enterprises will also strengthen the use of futures tools to better manage operational risks.
2、 Can the increase in soda ash production capacity become the norm
In the second half of 2023, the new production capacity of soda ash will be around 8 million tons, nearly 25% of the total production capacity in China. With the continuous implementation of China's dual carbon target policy and the continuous improvement of natural alkali extraction technology, the proportion of natural alkali production process will continue to rise.
Although natural alkali process enterprises have significant advantages in terms of cost and environmental protection, there is significant competitive pressure on manufacturers of ammonia alkali process and combined alkali process in the market. But the disadvantage of natural alkali method is that it is subject to the geographical location and supply of resources, and it is basically impossible to increase the production capacity of natural alkali method as a normal state.
Due to the large discharge of waste liquid and residue, ammonia alkali process enterprises are not suitable for the current basic policies of China in terms of environmental protection. In the future, it is not only difficult to obtain approval for new production capacity, but also may gradually withdraw from the market due to issues such as high energy consumption, high pollution, and high emissions.
The increase in production capacity of the combined alkali method is subject to strict constraints imposed by the state on the production capacity of the pure alkali industry. At present, the intelligent and intelligent development of domestic alkali enterprises is not advanced enough. In the future, the joint alkali method enterprises may further strengthen technological transformation, strictly control the increase in production capacity, and only replace existing devices with equal or reduced quantities to accelerate the green development of the industry.
From the perspective of medium to long term market development, small and medium-sized production capacity devices mainly using ammonia alkali method and combined alkali method have significant disadvantages in terms of economy and environmental protection. Low efficiency production capacity may accelerate its exit, and industry production capacity may undergo a new round of reshuffle.
3、 What are the incremental changes in demand for soda ash for float glass in the second half of the year
At present, the production of float glass has maintained a certain level of stability, and the cost and profit of glass enterprises are trending towards improvement. The demand for soda ash is strongly maintained. In the first half of the year, the profit margin of glass production was significantly restored, and glass companies' willingness to resume production and ignite increased, while their willingness to undergo cold repairs weakened, resulting in a significant increase in production capacity. According to publicly available statistics, as of the end of June, there were a total of 311 float glass production lines in China, with 246 in production and a daily melting capacity of 168350 tons. From January to June, there were a total of 7 new ignition lines in China, with a daily melting capacity of 6070 tons, 13 production lines resumed, with a daily melting capacity of 8750 tons, 15 cold repair and shutdown lines, and a daily melting capacity of 8560 tons. The net daily melting capacity increased by 6260 tons, and the production capacity increased by nearly 4% in the first half of the year.
The current profit recovery in the glass industry has resulted in a high willingness to resume production and ignite fires in the future. It is understood that there are still many production lines waiting to be ignited and resumed in the third quarter. It is expected that the daily melting capacity of glass will increase to 172000 tons by the end of the third quarter, and the daily melting capacity in the fourth quarter may remain high and fluctuate. It is expected that the increase in glass production capacity in the second half of the year will be 2.5% -3%.
4、 Can photovoltaic glass support the strengthening of soda ash fundamentals in the second half of the year
According to statistics, the total production capacity of photovoltaic glass by the end of 2022 was 84000 tons per day, an increase of over 70% year-on-year. In May 2023, the Ministry of Industry and Information Technology issued a notice on further improving the risk warning of photovoltaic rolled glass production capacity, requiring strict implementation of the production capacity warning system. The background of the introduction of the photovoltaic glass production capacity warning system is mainly due to the rapid expansion of domestic photovoltaic glass production capacity and the obvious trend of oversupply. The implementation of the production capacity warning system has a relatively small impact on the ongoing production lines, but a significant impact on the unfinished production lines; It has a significant impact on economically developed regions and a relatively small impact on the western region. With the strict implementation of production capacity warning systems in various regions, the growth rate of photovoltaic glass supply will gradually slow down in the future.
Considering that the production capacity under construction exceeds 50000 tons/day, the production of photovoltaic glass is expected to maintain a high growth rate in the short to medium term, and the demand for soda ash is increasing significantly. But in the long run, as the photovoltaic glass industry enters surplus, the new supply in the photovoltaic glass industry will gradually decrease, and the incremental demand for soda ash will decrease.
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