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Soda ash spot is scarce, prices are rising, and companies in the industry chain have sufficient orders
2023/11/28
"At present, the company's soda ash production is operating at full capacity, with a tight balance between production and sales, sufficient orders, strong downstream customer demand, and inventory at a relatively low point. The tight spot market situation continues," the relevant person in charge of Jiangyan Group told reporters recently.
Affected by factors such as tight spot prices, on November 27th, pure alkali futures saw a significant increase, with the main contract rising by more than 8%. The price has approached the 2500 yuan/ton mark, reaching a new high in nearly 9 months. In terms of spot market, the domestic soda ash market has also continued to rise. According to data from Baichuan Yingfu, as of November 27th, both light and heavy soda ash in China have risen by over 500 yuan/ton per month. Among them, the average market price of light soda ash is 2509 yuan/ton, an increase of 80 yuan/ton from the previous working day; The average market price of heavy caustic soda is 2722 yuan/ton, an increase of 57 yuan/ton from the previous working day. Meanwhile, the profit of the domestic soda ash industry continues to rise, with an average gross profit of about 626.8 yuan/ton, a significant increase.
Several industry insiders have expressed that the uncertainty in the supply side of soda ash may continue to support the strong market situation, and it is expected that the prosperity of the soda ash industry will be maintained until the end of this year.
Sufficient orders from industry chain companies
According to statistics from Baichuan Yingfu, the spot inventory of soda ash manufacturers has shown a downward trend recently. As of November 23, the total inventory of domestic soda ash enterprises is expected to be about 365000 tons, a decrease of 12.01% from the previous week. The listed companies producing soda ash in A-share market mainly include Yuanxing Energy, Sanyou Chemical, Shandong Haihua, Zhongyan Chemical, Hebang Biology, Jiangyan Group, Xuetian Salt Industry, etc. The reporter learned that currently, almost all companies operate at full capacity and their inventory is at a low level. Most manufacturers have already saturated their orders in November, and some manufacturers have already filled up their orders in December. There is almost no stock available in the near future.
It is worth mentioning that supply shortage is the main reason for the rise in the soda ash market this time. A person in charge of a listed company that produces soda ash told reporters that the recent shipment volume of the soda ash industry has exceeded production, resulting in a further decline in the inventory of soda ash manufacturers. Downstream customers have a high willingness to purchase goods, and the supply-demand relationship is in a tight balance.
"Due to some reasons, some companies in the industry have not been able to start production as scheduled. At the same time, some alkali plants are still operating at reduced loads. In addition, the first batch of central ecological environment protection inspections in the third round nationwide have been fully launched, including some areas of pure alkali production, which will further tighten the supply side," said the person in charge.
Source of incremental demand for photovoltaic glass
From the supply side, the new production capacity in the soda ash industry currently mainly comes from the natural alkali leader Yuanxing Energy. It is understood that the first phase of the company's Alxa natural alkali project has a total of 4 production lines, with a planned annual production capacity of 5 million tons of pure alkali and 400000 tons of baking soda. The first production line was put into trial operation at the end of June this year, the second production line was put into trial operation at the end of September, and the third and fourth production lines will also be tested one after another. At that time, the company will have a pure alkali production capacity of 6.8 million tons/year, ranking first in the industry.
Several industry insiders have expressed optimism about the trend of soda ash in the near future. Overall, the uncertainty in the supply side of soda ash will continue to provide support for the strong market situation. The current downstream demand increment in the market is limited. Although there has been an increase in downstream replenishment willingness recently, the supply and demand structure of soda ash has changed relatively quickly, and further observation is needed for future market changes.
According to relevant data, from January to October this year, the apparent consumption of soda ash in China reached a total of 23.54 million tons, a year-on-year increase of 8.63%. From the perspective of industrial chain demand, the glass industry still has the largest downstream demand for soda ash. "From the perspective of demand, float glass has the largest demand, mainly influenced by real estate; from the perspective of increment, it is mainly in photovoltaic glass," a person in charge of a soda ash production enterprise told reporters.
It is understood that each ton of glass consumes about 0.2 tons of pure alkali, accounting for 20% to 30% of the cost. In addition to traditional float glass, which cannot do without soda ash, with the rapid development of the photovoltaic industry, the demand for soda ash in photovoltaic glass is also growing rapidly. Meanwhile, high-end soda ash products can also be applied to the lithium battery industry such as lithium carbonate, and producing 1 ton of lithium carbonate requires approximately 2 tons of soda ash.
From the perspective of application classification, light soda ash is used in daily glass, sodium metabisulfite, caustic soda, metallurgy, printing and dyeing, water treatment, and lithium carbonate, while heavy soda ash is used in flat glass and photovoltaic glass. The production capacity allocation of manufacturers in light and heavy alkali is adjusted according to downstream market demand and price trends.
Several interviewed production company leaders stated that currently, heavy caustic soda has a greater proportion in the products. The previously popular downstream product, lithium carbonate, has experienced a significant price decline since the beginning of this year. Although major enterprises are operating normally, the overall operating rate of the industry is not high, and its contribution to the increment of light soda ash is limited.
Affected by factors such as tight spot prices, on November 27th, pure alkali futures saw a significant increase, with the main contract rising by more than 8%. The price has approached the 2500 yuan/ton mark, reaching a new high in nearly 9 months. In terms of spot market, the domestic soda ash market has also continued to rise. According to data from Baichuan Yingfu, as of November 27th, both light and heavy soda ash in China have risen by over 500 yuan/ton per month. Among them, the average market price of light soda ash is 2509 yuan/ton, an increase of 80 yuan/ton from the previous working day; The average market price of heavy caustic soda is 2722 yuan/ton, an increase of 57 yuan/ton from the previous working day. Meanwhile, the profit of the domestic soda ash industry continues to rise, with an average gross profit of about 626.8 yuan/ton, a significant increase.
Several industry insiders have expressed that the uncertainty in the supply side of soda ash may continue to support the strong market situation, and it is expected that the prosperity of the soda ash industry will be maintained until the end of this year.
Sufficient orders from industry chain companies
According to statistics from Baichuan Yingfu, the spot inventory of soda ash manufacturers has shown a downward trend recently. As of November 23, the total inventory of domestic soda ash enterprises is expected to be about 365000 tons, a decrease of 12.01% from the previous week. The listed companies producing soda ash in A-share market mainly include Yuanxing Energy, Sanyou Chemical, Shandong Haihua, Zhongyan Chemical, Hebang Biology, Jiangyan Group, Xuetian Salt Industry, etc. The reporter learned that currently, almost all companies operate at full capacity and their inventory is at a low level. Most manufacturers have already saturated their orders in November, and some manufacturers have already filled up their orders in December. There is almost no stock available in the near future.
It is worth mentioning that supply shortage is the main reason for the rise in the soda ash market this time. A person in charge of a listed company that produces soda ash told reporters that the recent shipment volume of the soda ash industry has exceeded production, resulting in a further decline in the inventory of soda ash manufacturers. Downstream customers have a high willingness to purchase goods, and the supply-demand relationship is in a tight balance.
"Due to some reasons, some companies in the industry have not been able to start production as scheduled. At the same time, some alkali plants are still operating at reduced loads. In addition, the first batch of central ecological environment protection inspections in the third round nationwide have been fully launched, including some areas of pure alkali production, which will further tighten the supply side," said the person in charge.
Source of incremental demand for photovoltaic glass
From the supply side, the new production capacity in the soda ash industry currently mainly comes from the natural alkali leader Yuanxing Energy. It is understood that the first phase of the company's Alxa natural alkali project has a total of 4 production lines, with a planned annual production capacity of 5 million tons of pure alkali and 400000 tons of baking soda. The first production line was put into trial operation at the end of June this year, the second production line was put into trial operation at the end of September, and the third and fourth production lines will also be tested one after another. At that time, the company will have a pure alkali production capacity of 6.8 million tons/year, ranking first in the industry.
Several industry insiders have expressed optimism about the trend of soda ash in the near future. Overall, the uncertainty in the supply side of soda ash will continue to provide support for the strong market situation. The current downstream demand increment in the market is limited. Although there has been an increase in downstream replenishment willingness recently, the supply and demand structure of soda ash has changed relatively quickly, and further observation is needed for future market changes.
According to relevant data, from January to October this year, the apparent consumption of soda ash in China reached a total of 23.54 million tons, a year-on-year increase of 8.63%. From the perspective of industrial chain demand, the glass industry still has the largest downstream demand for soda ash. "From the perspective of demand, float glass has the largest demand, mainly influenced by real estate; from the perspective of increment, it is mainly in photovoltaic glass," a person in charge of a soda ash production enterprise told reporters.
It is understood that each ton of glass consumes about 0.2 tons of pure alkali, accounting for 20% to 30% of the cost. In addition to traditional float glass, which cannot do without soda ash, with the rapid development of the photovoltaic industry, the demand for soda ash in photovoltaic glass is also growing rapidly. Meanwhile, high-end soda ash products can also be applied to the lithium battery industry such as lithium carbonate, and producing 1 ton of lithium carbonate requires approximately 2 tons of soda ash.
From the perspective of application classification, light soda ash is used in daily glass, sodium metabisulfite, caustic soda, metallurgy, printing and dyeing, water treatment, and lithium carbonate, while heavy soda ash is used in flat glass and photovoltaic glass. The production capacity allocation of manufacturers in light and heavy alkali is adjusted according to downstream market demand and price trends.
Several interviewed production company leaders stated that currently, heavy caustic soda has a greater proportion in the products. The previously popular downstream product, lithium carbonate, has experienced a significant price decline since the beginning of this year. Although major enterprises are operating normally, the overall operating rate of the industry is not high, and its contribution to the increment of light soda ash is limited.
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