Narrow Fluctuations in Soda Ash Market, Slight Tightening in Supply

June 12, 2024, 9:21 AM

Boododo

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Highlights at a glance

The domestic soda ash market saw narrow fluctuations the week of July 13, with light soda ash prices ranging from 1,850 to 2,050 yuan/ton and heavy soda ash delivered prices between 1,970 and 2,200 yuan/ton. Increased plant maintenance reduced operating rates to 82%, tightening supply as manufacturer inventories dropped 5.82% to 377,000 tons. While downstream demand for heavy soda ash remained stable and spot availability declined, especially in the futures market, buyers stayed cautious, limiting price momentum. Light soda ash demand was moderate, with just-in-time purchasing prevailing. Profits slightly rose for Solvay process producers to 730 yuan/ton, while ammonia soda profits dipped to 479.6 yuan/ton. Looking ahead, ongoing maintenance and low inventories may sustain tight supply conditions, but strong stockpiling sentiment is unlikely. The market is expected to remain steady with cautious optimism.

Soda Ash Weekly Review on 7/13: Narrow Fluctuations in Soda Ash Market, Slight Tightening in Supply

I. Analysis of the Domestic Soda Ash Market

The domestic soda ash market experienced narrow fluctuations this week. As of now, the mainstream ex-factory price for light soda ash in China ranged from 1850 to 2050 yuan/ton, while the mainstream price for delivered heavy soda ash to end-users ranged from 1970 to 2200 yuan/ton. The number of soda ash maintenance manufacturers increased this week, leading to a decrease in market supply. Manufacturers' inventories continued to decline, resulting in a sustained tight supply of spot goods. Overall, the demand for downstream heavy soda ash remained good, but there was still strong price pressure from enterprises. The demand for light soda ash was average, with companies maintaining just-in-time procurement. The soda ash futures market saw a significant price increase this week, gradually reducing the availability of low-priced futures goods. However, downstream enterprises remained cautious in their purchasing, and market prices were negotiated on a case-by-case basis.

Prediction for Next Week: In the near future, soda ash market maintenance and increased load reduction by companies may lead to a tight supply of some goods in the market. Manufacturers' inventories will remain at a low level. The late-stage demand for downstream heavy soda ash may increase, but the enthusiasm for stockpiling by enterprises is not high, maintaining a demand-based replenishment approach. Market sentiment is cautious, and the soda ash market is expected to continue to operate steadily.

II. Comparison of Soda Ash Market Prices in Different Regions

III. Soda Ash Process Profit Statement

As of July 13th, the profit for the Solvay process was 730 yuan/ton, with a week-on-week increase of 1.2 yuan/ton. The profit for the ammonia soda process was 479.6 yuan/ton, with a week-on-week decrease of 7.4 yuan/ton.

IV. Soda Ash Plant Maintenance Situation

This week, the operating rate of the soda ash industry was 82%, a 3% decrease compared to the previous week. Among them, the average operating rate for ammonia soda ash manufacturers was 82%, for Solvay soda ash manufacturers was 80%, and for natural soda ash plants was 86%. Based on incomplete statistics, the soda ash production of manufacturers this week was around 550,000 tons.

V. Soda Ash Manufacturer Inventory

The total inventory of domestic soda ash manufacturers this week was 377,000 tons, a decrease of 23,300 tons or 5.82% compared to the previous week's 400,300 tons.