5.6 Daily Review of Soda Ash: Some Soda Ash Market Prices Weakly Declined|BDD

Soda ash market analysis

Today, the domestic soda ash market price is weak and falling, and the price in some markets has been reduced by 20-50 yuan/ton. As of now, the price of light soda ash in South China is 1540-1670 yuan/ton, and the price of heavy soda ash is 1500-1700 yuan/ton; the price of light soda ash in North China is 1400-1500 yuan/ton, and the price of heavy soda ash is 1460-1550 yuan/ton. The soda ash plant has recently shown a trend of shock adjustment. The operating load of Jiangsu Huachang Chemical's soda ash plant has dropped to about 50%, and it is planned to stop on May 12; Jiangsu Jingshen soda ash plant is partially overhauled, and the start-up has dropped to about 60%. The current soda ash market supply is still abundant, and the inventory backlog problem is more prominent. Downstream purchases are mostly small orders for rigid demand, and the market's enthusiasm for replenishing soda ash is generally not high.

Futures dynamics

According to Boduoduo data: On May 6, the opening price of the main soda ash contract SA2509 was 1,346 yuan/ton, and it finally closed at 1,330 yuan/ton, with a daily decline of 1.92%. The highest intraday price was 1,364 yuan/ton, the lowest was 1,320 yuan/ton, and the total position was 1,030,266 lots, up 96,498 lots month-on-month.

Today's soda ash futures prices fell sharply, mainly because the hype sentiment caused by the previous supply-side maintenance disturbance has fallen, and the mid- and downstream replenishment before the holiday has basically ended, and the demand-side support has weakened. The premium delivery cost on the market may reduce the maintenance expectations to a certain extent, so funds have rushed to kill the premium. Overall, the high inventory problem in the middle and upper reaches of soda ash is still difficult to effectively alleviate, and the supply still meets the downstream demand repair. However, the maintenance disturbance in May is still a fact, and the valuation support on the market still exists, and the risk of rushing to hit the discount is also relatively large. In the short term, it is not recommended to be overly bearish, and wait and see the story of maintenance.

Market Forecast

In the short term, the soda ash market is expected to maintain a narrow range of fluctuations. On the one hand, the implementation of the maintenance plan will provide certain support to the supply side; on the other hand, it will take time for downstream demand to improve. Although some manufacturers intend to raise prices, the overall market lacks strong support and prices are expected to be difficult to rise significantly. We need to continue to pay attention to the recovery of downstream demand and the pace of new capacity release.

Data source: Boduoduo Data Group