5.9 Soda Ash Daily Review: The overall soda ash market stabilized

Soda ash market analysis

Today, the domestic soda ash market remained stable overall, with a slight decline in some areas. 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. On the supply side, the number of manufacturers undergoing maintenance and reducing production has increased, and the industry's operating load has decreased. 

It is expected that the supply will continue to shrink in the later period. The demand side is weak. Due to poor profitability, downstream companies are not very active in purchasing. Most companies still prioritize digesting existing inventory. Market transactions are mainly small orders for rigid demand and low-price transactions. At present, the new orders of soda ash manufacturers are generally traded, and the willingness to stabilize prices is strong.

Futures dynamics

According to Boduoduo data: On May 9, the opening price of the main soda ash contract SA2509 was 1,318 yuan/ton, and it finally closed at 1,305 yuan/ton, with a daily decline of 0.38%. The highest intraday price was 1,329 yuan/ton, the lowest was 1,300 yuan/ton, and the total position was 1,221,435 lots, an increase of 17,878 lots month-on-month.

Today, the soda ash futures price fell sharply with the overall market sentiment and downstream varieties. There is no obvious improvement in the fundamentals of soda ash itself.

Some supply-side maintenance companies have started, but they cannot reverse the oversupply pattern in a short time. In addition, the new production capacity is about to land, and the market is not driven enough. 

The downstream purchasing intention is not high, and the midstream shipments squeeze the market. However, the scale of supply-side maintenance companies will increase in the middle and late part of this month, especially the maintenance of several large ammonia and alkali factories may have a greater impact on some specific downstream rigid demand.

The upstream willingness to support prices is still strong, and the risk of further deepening the discount on the market still exists. For the time being, it will maintain weak fluctuations and wait for the maintenance to be realized.

Market Forecast

On the whole, the contraction trend on the supply side is becoming more and more obvious. Although the overall performance of the demand side is weak, as the inventory is gradually digested, some rigid demand purchases begin to appear, which provides certain support to the market.

It is expected that market prices will be mainly stable in the short term. Some areas with relatively tight supply and demand structures cannot rule out the possibility of a small increase. In the future, we still need to pay close attention to the implementation of the new maintenance plan and the changes in the actual purchasing rhythm of the downstream.

Data source: Boduoduo Data Group