Recently, the spot supply of soda ash has been tight, and the market is not active. The stock of soda ash in terminal enterprises is low, and some even face the pressure of raw material supply interruption. The inventory of superposed alkali plants has fallen to a new low in recent years, and comprehensive factors have driven the rapid rise in the price of soda ash. In September, the market price in low-priced regions reached more than 3, 000 yuan (ton price, the same below), and in some areas it reached 3, 500 yuan. The increase in the past month was as high as 1, 000 yuan.

There are three reasons for this round of extreme stockout. Firstly, the supply and demand was tight during the year. Before the new capacity of the soda industry was put into operation, the original capacity could not meet the new demand in recent years. Under the premise of a strong market, the soda ash market experienced a process of price decline led by panic, followed by a recovery and rise.

Second, terminal enterprises will actively reduce the inventory of soda ash raw materials in April and May in anticipation of future capacity increases and price declines. The glass industry is the terminal industry with the most concentrated downstream demand for soda ash. Glass companies have taken the initiative to reduce their raw material reserves for soda ash, down to about 12 days at the end of May. As of late August, due to the continued tight supply of market, the stocking days of soda ash for sample glass enterprises fell to less than 9 days. From the analysis, the decrease in terminal reserves in the early stage was based on the expectation of price decline, while the decrease in the past month was due to the shortage of supply. At present, the profit margin of finished products is still sufficient, and if the terminal is facing the risk of supply interruption, it is reasonable and helpless to chase high-priced spot goods to ensure normal production.

Thirdly, in the context of the imminent increase in production capacity, the alkali plants also have the intention to realize profits and extend orders in the first half of the year. When prices fall, panic can easily arise and sales channels need to be actively expanded. Some alkali plants actively received export orders during the weak price in the first half of the year, and their export performance exceeded market expectations under the situation of both domestic volume and price declines.

At present, the demand side is relatively stable, and the only way to alleviate the current supply and demand tension is to increase the output of the supply side. The subsequent output increase mainly comes from the inherent capacity and new capacity of the industry. In terms of inherent capacity, with the reduction of maintenance plans for alkali plants, production will gradually rebound in the next stage. However, there have been frequent reports of temporary failures that have led to short-term shutdowns and a decrease in operating rates in soda factories, so the time for the subsequent recovery of soda load is still unclear. For new capacity, the production of related devices is still increasing, and there may be incremental production in September to alleviate the pressure. After the relevant capacity is successfully reached, the current extreme shortage situation will be improved. It is expected that there will still be a large capacity of production in September that will be affected by load reduction and maintenance, so it is ideal if the production can be increased to the level of supply and demand balance by the end of September. For terminal enterprises, the supply and demand of the industry will be loose in the future, but in the short term, it is still necessary to avoid the risk of raw material supply shortage.

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