Since the launch of soda ash, inventories have been accumulating and prices have fallen. From the supply side, there is a slight overcapacity. After the Spring Festival, with the resumption of soda ash enterprises, the supply exceeds the demand. From the demand side analysis, it is difficult to improve the output of the downstream glass of the heavy soda end when it is pressed by high storage; the overall consumption of the light soda end is stable and the export is difficult to improve. It is expected that the supply and demand pattern of soda ash in the future will continue.
Continuous accumulation of inventory
At present, the supply of soda ash exceeds the demand. In 2019, the capacity of soda ash will increase by 2.6 million tons, an increase of 8.44%, and the capacity will be in the pattern of excess. From the supply side, the regulation of soda supply is relatively flexible. During the Spring Festival, many soda enterprises carry out maintenance, the overall supply pressure drops, and the increase of soda inventory slows down. With the domestic social public events under control, the downstream gradually returned to work and production, the operating rate of soda ash enterprises increased, and overcapacity began to suppress inventory de production.
At present, the soda ash inventory is at a historical high level, and it is difficult to de inventory. During the Spring Festival, the rapid increase of soda ash inventory is mainly due to the stagnation of downstream demand, Limited Logistics and transportation, which belongs to seasonal accumulation. Affected by social public events after the festival, the downstream resumption of production was delayed, and transportation was blocked, resulting in the continuous accumulation of enterprise inventory. After the soda ash enterprises gradually returned to work and production in the middle of February, the soda ash inventory has been maintained near the historical high of 1.1 million tons.
Stable downstream consumption
The downstream of heavy soda ash is mainly glass industry. Due to the fact that the kiln design can not achieve free switching, the glass production did not stop during the social public events, plus the closure of Wuhan, which is an important transportation hub and demand market. At the same time, the deep processing operation rate in other regions is not high, and the glass inventory accumulated to a high level after the Spring Festival. In order to cope with the inventory pressure, about 5 glass production lines were cold repaired in advance, and the subsequent resumption plan was delayed accordingly. The overall demand for heavy alkali was suppressed by the depression of the glass market. The downstream inorganic salt products of light alkali are mainly traditional products, basically without new areas, and the demand tends to be stable. The capacity of individual industries has expanded, but the overall consumption is stable, and the downstream demand of light alkali will not fluctuate too much. On the whole, the downstream demand of light and alkali is relatively stable.
The export proportion of soda ash is 5% – 8%, which is not high in recent years. The spread of overseas social public events makes overseas demand shrink. Since March 20, the export tax rebate rate of soda ash products has increased to 13%, which is good for soda ash export, but the prospect of international market demand is bleak, and it is difficult for overseas market to support prices.
In a word, the soda ash market is under the pressure of high storage with overcapacity and slowing demand. The short-term soda plants maintain production and the downstream demand is weak. The price center of soda ash slowly moves down with the continuous accumulation of inventory. At present, the profits of some soda ash production enterprises in Shandong and Henan are at the break even point, and the decline speed of spot price slows down. Enterprise production reduction or soda price turning signal.