SunSirs: In the First Half of 2023, the Overall Market for Soda Ash Was High at the Beginning and Then Walking Low, Showing a ‘Parabolic’ Pattern-I

Price trend

According to the Commodity Analysis System of SunSirs, in the first half of 2023, the overall decline of soda ash was observed, with a "parabolic" pattern. At the beginning of the year, the average market price was 2,648 RMB/ton, and on June 30th, the price was 1,960 RMB/ton, a decrease of 25.98%.

From the annual price comparison chart of soda ash, it can be seen that the highest price of soda ash occurred around November 2021, and in the first half of 2023, the overall trend was high at the beginning and then walking low.

Market outlook

Supply side:

Data shows that as of July 6th, the inventory of domestic soda ash production enterprises was 395,800 tons, which was at a five-year low level. The maintenance of soda ash from July to August is relatively concentrated, and it is expected that domestic soda ash inventory will slightly decrease in the short term.

Demand side:

From the comparison chart of soda ash and glass price trends, it can be seen that the spot market of glass rose from January to June 2023. The average price in the monitored area was 18.68 RMB/square meter on January 1, and 21.35 RMB/square meter on June 30, with a comprehensive increase of 14.29% in the first half of the year. Although the price of glass slightly increased from April to May, after the phased replenishment ended, market confidence weakened and glass prices continued to weaken.

Analysts from SunSirs believe that there will be more companies engaged in equipment maintenance for soda ash from July to August, and overall inventory will decline, providing favorable support for soda ash prices. However, based on the glass situation, real estate support is average, market confidence is average, and there is little room for soda ash prices to rise. In addition, although there are many short-term maintenance plans for soda ash, the production capacity deployment cycle for soda ash will also start. If new production capacity is launched on schedule in September, the inventory of soda ash will continue to accumulate. Data shows that the total inventory of domestic soda ash is expected to increase by 500,000 to 700,000 tons in the fourth quarter, with upstream inventory exceeding 1 million tons. Overall, it is expected that the price of soda ash in the fourth quarter may be significantly under pressure, depending on downstream market demand.

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