I. Review of the Soda Ash Market in 2025

According to the business data analysis system of SunSirs, the soda ash market experienced a weak downward trend in 2025, with prices fluctuating downwards. The average price of soda ash at the beginning of the year was 1,528 RMB/ton, and the average price at the end of the year was 1,250 RMB/ton, representing a price decrease of 18.19% over the year.

Under the triple pressure of "high supply, weak demand, and high inventory," the sustainability of the soda ash price rebound in 2025 was severely constrained. The soda ash market only experienced three significant price increases during the year: in early March, driven by maintenance expectations and delays in new capacity; in July, supported by expectations of "anti-overcapacity" policies and cost factors; and in the fourth quarter, primarily due to rising coal prices and a surge in exports, leading to a temporary improvement in the soda ash market. Overall, the soda ash industry was characterized by the coexistence of capacity expansion and weak demand, with continuous market sentiment fluctuations.

II. Analysis of Factors Affecting Soda Ash Prices in 2025

Continued capacity expansion intensified supply pressure

In 2025, new soda ash plants of companies such as Lianyungang Alkali Industry, Lianyungang Debang, Yingcheng Xindu Chemical, and Hubei Shuanghuan successively came into operation, adding 5.5 million tons of capacity, representing a 14% increase in production capacity, bringing the total capacity to 45 million tons.

Amidst a loose supply situation, the import market contracted sharply, making exports a crucial breakthrough. From January to November 2025, cumulative imports totaled only 21,700 tons, a year-on-year decrease of 97.76%, while exports reached 1.9612 million tons, a year-on-year surge of 88.83%, reaching a five-year high and achieving a high degree of export substitution.

Downstream production declined, and demand was weak and under pressure

The downstream glass market experienced volatile and declining trends in 2025. Float glass production continued to suffer losses due to a decrease in completed real estate projects, leading to an increase in cold repair lines. While photovoltaic glass production saw some growth, industry profits was squeezed, capacity expansion slowed down, and the growth rate of heavy soda ash demand decreased significantly. Downstream lithium carbonate demand, driven by the development of new energy vehicles, maintained growth, providing some support for light soda ash demand. However, its relative share was small and insufficient to offset the pressure from declining heavy soda ash demand.

High inventory levels were putting pressure on the market, and the price recovery was limited

In 2025, soda ash inventories remained consistently high, fluctuating above 1.4 million tons throughout the year. By the end of the year, combined manufacturer and delivery warehouse inventories exceeded 2 million tons, reaching a historical high for the same period. High inventory levels became a significant factor suppressing prices.

The market prices of raw materials, benzene and propylene, were weakening simultaneously, resulting in weak cost support

The benzene market performed particularly weakly, with a cumulative decline of over 8% in September and October, mainly due to the structural contradiction between surging imports and insufficient downstream demand; the propylene market also showed a downward trend, with average monthly prices in Northeast and North China falling below 6,000 RMB/ton, reaching a new low for the year. The weak performance of raw materials deprived phenol of cost support, further releasing downward pressure on prices.

Cost advantages were becoming evident

The costs of different production processes varied significantly: the natural soda ash process costs less than 1,000 RMB/ton, the combined soda ash process costs 1,050-1,200 RMB/ton, and the ammonia-soda process costs over 1,300 RMB/ton. As of December 31, companies using the combined soda ash and ammonia-soda processes were facing survival pressure and were mostly operating at a loss. The natural soda ash process, however, had a clear cost advantage, giving Chinese soda ash stronger price competitiveness in the international market and driving domestic soda ash exports.

III. Soda Ash Market Forecast for 2026

Supply side remains under pressure

The planned soda ash capacity additions for 2026 have slowed down. The capacity changes in the first half of the year mainly come from the commissioning of the second phase of Yuanxing Energy and the Yingcheng Xindu project at the end of 2025. In the second half of the year, the Jinshan Hubei Qianjiang and Hunan Xuetian Salt and Alkali projects are planned to come online, adding 2.5 million tons of capacity. The total soda ash industry capacity in 2026 is expected to reach 47.5 million tons, with production increasing by over 10% year-on-year. Supply-side pressure remains high, and high inventory levels continue to limit the extent of price rebounds.

Weak Demand Growth

Float glass is being dragged down by the real estate cycle, making it difficult for demand to show significant improvement; photovoltaic glass faces overcapacity, and the slowdown in installation growth is reducing demand for soda ash. While downstream industries for light soda ash, such as lithium carbonate, water treatment, and MSG, are expected to grow by around 8%, overall demand growth is slower than supply growth, making it difficult to change the oversupply situation.

Industry Structure Optimization

Facing the landscape of continuously increasing production capacity and shrinking corporate profits, 2026 will be a critical stage for capacity rationalization and structural optimization in the soda ash industry. Natural soda ash production, with its advantages of low cost and low energy consumption, is continuously expanding its market share and becoming the dominant force in the market, while the high-cost ammonia-soda process faces increasing pressure to exit the market.

Summary and Outlook

In the short term, market factors remain mixed, with prices continuing to fluctuate at low levels, and the overall industry sentiment remains bearish.

In the long term, the oversupply situation is unlikely to change. A rebalancing of supply and demand will only be possible after a substantial exit of high-cost production capacity or a significant reduction in inventory. However, the continuous expansion of low-cost production capacity will also drive down costs, meaning soda ash prices still face downward pressure.

Overall, the supply-demand imbalance in the soda ash industry is unlikely to be reversed in 2026. Price pressure and widening losses will become the norm, and industry restructuring and capacity reduction will be the main themes throughout the year.

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