5.7 Soda Ash Daily Review: The soda ash market remains stable with no significant price fluctuations

Soda ash market analysis

Today, the domestic soda ash market remained stable, with no significant price fluctuations. As of now, the price of light soda ash in East China is 1340-1530 yuan/ton, and the price of heavy soda ash is 1420-1500 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. In terms of supply, the soda ash units of Shilian Chemical, Jiangsu Jingshen, and Huachang Chemical are under maintenance, and the operating load of important production units such as Shandong Haitian, Southern Alkali Industry, and Tangshan Sanyou is not full. The overall operating rate of the industry has declined slightly, and the supply has shrunk.

The demand side is relatively flat, downstream companies are not willing to purchase, the market trading atmosphere is weak, and they are mainly replenished with low-priced rigid demand, and the overall wait-and-see sentiment is strong.

Futures dynamics

According to Boduoduo data: On May 7, the opening price of the main soda ash contract SA2509 was 1,330 yuan/ton, and it finally closed at 1,323 yuan/ton, with a daily decline of 0.90%. The highest price was 1,354 yuan/ton, the lowest was 1,316 yuan/ton, and the total position was 1,168,356 lots, up 138,090 lots month-on-month.

Today, the soda ash futures price rose and fell with the market environment, mainly due to the policy expectations of the State Council Information Office press conference today. This press conference did introduce a series of policies such as lowering the reserve requirement ratio and interest rates. However, given that the policy has temporarily limited improvement in demand for the commodity itself and it takes time to transmit, after the press conference, the market trading returned to the fundamental logic. The fundamentals of soda ash itself are still weak in the short term. Although there are supply disturbances, it is still unable to reverse the oversupply pattern in the short term. The news that new production capacity is about to land has led to insufficient market drive, and it is still mainly to kill the premium. However, the scale of enterprises undergoing maintenance on the supply side will increase in the following months, and the willingness of upstream companies to maintain prices is still strong, so there is still a risk of further deepening the discount.

Market forecast

On the whole, the tightening of the supply side provides some support for prices, but the sluggish performance of the demand side limits the upward space. It is expected that the domestic soda ash market will maintain a narrow range of consolidation in the short term, and attention should be paid to the dynamics of the equipment and changes in downstream demand.

Data source: Boduoduo Data Group