Despite the oversupply of the soda industry, new production capacity is still being released. Some of the production capacity of 600,000 tons of Fengcheng Salt in Xuzhou and 1 million tons of soda ash in Qinghai Kunlun has recently been concentrated in the market, directly leading to the recent rapid decline in the price of soda ash. Affected by the impact of low-priced sources of supply, the inventory of manufacturers in eastern China has risen again.
In May last year, the price of soda ash began to fall from a high of 2,200 yuan/ton, and fell all the way to the current 1400 yuan to 1,500 yuan/ton. Recently affected by new capacity, soda ash prices have been forced to go lower again. The two large soda ash plants in Fengcheng Salinization and Qinghai Kunlun were completed in August and October last year and have recently entered the market.
According to previous years' experience, the peak season for the soda ash industry is expected from May to June each year. Zhuo Chuansha, an analyst at Zhuo Chuang, told reporters that at present Fengsheng Salting’s 600,000-tonne plant is half under construction, and the remaining 300,000 tons is scheduled to start in April this year. The capacity of Qinghai Kunlun is also gradually released in the wait and see. The current installation is running 900,000 tons. .
New production capacity in Qinghai, Xuzhou, and other places is concentrated in the middle east and central China. Affected by the supply of low-priced goods, the weekly stocks of soda ash companies in Shandong have generally exceeded the average inventory of last year. Taking a leading company in Shandong as an example, the current weekly inventory has suddenly risen to 50,000 tons, which greatly exceeds the previous average of 30,000 tons.
At present, the price of light alkali in Qinghai is about 1,450 yuan/ton, and that of heavy alkali is 1,550 yuan/ton, while the mainstream price of light soda and heavy soda in Northeast China is 1,600 yuan/ton respectively. 1,700 yuan / ton, the price is higher than the source of goods in the field, which brought great pressure on local enterprises in Northeast China. As judged by the industry, new production capacity does not hesitate to hit the market at a low price. It is still optimistic about the slow recovery of downstream demand.
According to reports, in the two main production processes of soda ash, the ammonia-alkali production method and the soda production method cost 1600 yuan to 1,700 yuan per ton and 2,100 yuan to 2,200 yuan per ton, respectively, according to the current light soda 1400 yuan to 1,500 yuan. About the market price of tons, in fact, most companies are producing at a loss.
If there is a bright spot in the entire soda industry, I am afraid it is only concentrated on the downstream ammonium chloride of the Alkali Method. According to Yu Nana, an analyst at Zhongyu Information, due to the large volume of ammonium chloride in the bonded area before the year and the active purchase of downstream compound fertilizer manufacturers, the recent market trend of ammonium chloride is good, the market supply is tight, and post-holiday products have increased. About 100 yuan / ton, at a high level, the demand for the soda ash method has rebounded.
However, from the understanding of the industry, soda ash makers are mostly pessimistic about the outlook. Based on an industry capacity of nearly 29 million tons last year and an average operating rate of 80%, the actual output is 23 million tons or more, which exceeds the actual demand of about 2 million tons. Although a large number of new production capacity has entered the market this year, the construction of the main downstream glass industry is still at a low level, and the housing market also lacks a clear boost. Therefore, most manufacturers judge that the price of soda ash in the market will remain low.
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