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It is only a matter of time before soda ash prices return to the low level

wallpapers News 2020-07-20

Since the end of August, the price of domestic soda ash has gone up quietly, the absolute increase of ton price has reached about 400 yuan.

For this reason, soda ash enterprises, which have been suffering for two years in the downturn, have finally breathed a sigh of relief.

For a period of time, the atmosphere of a favorable situation has permeated the production circulation links.

Many manufacturers believe that the soda ash market will usher in a new round of prosperity.

However, after a comprehensive study on the existing huge capacity of soda ash industry, the depression of downstream industries, the large-scale resumption of idle units, the rise of raw salt prices, the author believes that the above optimistic judgment is somewhat impractical.

From a rational point of view, the current fiery soda industry is only a slight rebound.

Analysis shows that there are two main reasons for this wave of market: first, in recent years, the soda ash market has been in a downturn for a long time, production enterprises have taken measures to limit production reduce inventory to the greatest extent.

China Soda Industry Association figures show that in the first eight months of this year, the national soda ash production decreased by 2.

7% year on year, which is rare in the field of basic chemical raw materials.

Similarly, circulation enterprises also suffer from the fear of storage, dare not take goods, even dare not store goods.

It is obvious that all parties maintain a defensive attitude, resulting in insufficient inventory.

Therefore, under the condition of just dem consumption the reduction of overall inventory to the limit, a more concentrated purchase behavior is triggered, the market's usual follow-up operation, thus boosting the price of soda ash continues to rise.

However, if the market is booming, it will induce the production enterprises to increase the load, the supply of the market will soon catch up, the price will not be strong.

Second, due to the continuous downturn of soda ash industry, the crude salt market is in a state of panic, the industry has a strong desire to rise.

In addition, affected by the weather this year, the production of sea salt in East China has been greatly reduced, which has directly boosted the price of salt.

However, the rising price of raw salt directly promoted the price of soda ash.

However, on the whole, the domestic raw salt supply is not tight, the possibility of its price rising continuously is very small, so the support role of the cost for soda ash is not strong.

In fact, the relationship between supply dem in China's soda ash market has long been broken, the serious overcapacity is like a lingering nightmare.

At present, the total production capacity of domestic soda ash has exceeded 35 million tons, while the total dem, including nearly 2 million tons of export, is only about 22 million tons.

What's more, although the soda ash market has been saturated the operating rate of the industry is low, whether in the coastal areas with rich sea salt resources, the inl areas with brine resources, or the western regions with well mineral salt resources, the vigorous expansion of capacity has been pushed to a climax.

In 2012, the new capacity of soda ash is 1.

9 million tons, which is expected to reach 4 million tons this year.

Taking Jiangsu Province as an example, relying on the rich sea salt brine in the coastal Northern Jiangsu areas, nearly 10 sets of soda ash plants have been put into operation under construction in the whole province within the year.

The scale of the units is often more than 500000 tons / mu, there are several sets of units with a capacity of 1 million tons / year.

At present, the total production capacity of the whole province has exceeded 3 million tons / year.

With the large-scale operation of production units, it is difficult for soda ash market to turn around prosper.

From the downstream, the soda ash market is hardly optimistic.

The largest downstream of soda ash is the building materials glass industry.

As we all know, since the implementation of real estate regulation measures, the blind investment craze has been effectively curbed.

In addition, there are still a large number of unsold commercial houses in various regions.

Therefore, the peak dem for building materials glass in the real estate industry has passed, which will affect the dem for soda ash.

In other downstream areas, such as detergent, leather, metallurgy, papermaking, inorganic salts, ceramics other traditional industries, there is no hot dem, it is simply unable to digest the excess soda ash.

To sum up, the current prosperity of soda ash market is only a short-term phenomenon, excess capacity devices can fill the short-term supply shortage of the market at any time.

In the case of no obvious growth in downstream dem, it is only a matter of time before the price of soda ash returns to the downturn.


TRUNNANO (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals and Nanomaterials. The nitride powder produced by our company has high purity, fine particle size and impurity content. Please contact us if necessary. (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals Nanomaterials. The nitride powder produced by our company has high purity, fine particle size impurity content. Please contact us if necessary.
TRUNNANO (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals and Nanomaterials. The nitride powder produced by our company has high purity, fine particle size and impurity content. Please contact us if necessary.