Soda ash: strong demand opens high

　　In the first half of the year, the domestic soda ash market opened higher and moved higher
.
The growth rate of supply was not as fast as that of demand, and the market price of soda ash rose to a high level in the same period
.
As of the end of June, the mainstream ex-factory price of domestic light alkali is 2750~3000 yuan (ton price, the same below), and the mainstream delivery price of heavy alkali is 3030~3170 yuan, which is 25%~30% higher than the lowest price at the beginning of the year
.

　　Longzhong Information soda ash industry analyst Xu Binhua: the market focus continues to move up

　　In the first half of the year, the domestic soda ash market continued to rise, the focus of transactions continued to move upward, and the price was at a historically high level for the same period
.
From January to June, the average price of light soda ash increased by 617 yuan, and the average price of heavy soda ash increased by 350 yuan
.

　　The soda ash market in the first half of the year is roughly divided into three stages:

　　From the beginning of the year to the first ten days of March, under the support of strong demand expectations, the price of soda ash rose unilaterally
.
The property market regulation policies in various places have been relaxed, the market has strong expectations for the growth of demand in the later period, and the futures market has risen, which has driven the transaction atmosphere in the spot market.
In addition, end users have replenished a lot of goods, and the spot price of soda ash has risen unilaterally, with a cumulative increase of 300-500 yuan
.

　　From mid-March to late March, the period was negative, and the spot price of soda ash fell
.
The demand in the glass industry is weak, the orders of downstream deep processing enterprises are insufficient, and the inventory continues to rise
.
Coupled with the high inventory and high operating rate of soda ash, the price of the main futures contract was reduced by 500 yuan
.
Futures merchants are actively shipping, and low-priced supply has a certain impact on the spot market, and the spot price of soda ash has been reduced by 50 to 100 yuan
.

　　From the end of March to the end of June, the fundamentals of supply and demand improved, and the soda ash market continued its mild upward trend
.
The production of photovoltaic glass exceeded expectations, and some float glass production lines resumed production, but there was no increase in the supply of soda ash, which drove the spot price to rise moderately, with a cumulative increase of 300-400 yuan
.

　　Wang Zhe, chief analyst of CITIC Securities Energy and Chemical Industry: The price is expected to remain high

　　In the second half of the year, the supply and demand of soda ash is expected to remain tight, and we are optimistic about the elasticity of price increases
.

　　In terms of supply, the production capacity of soda ash is relatively rigid, and there is limited room for supply improvement.
It is expected that the production capacity of soda ash will increase by 600,000 to 900,000 tons in the second half of the year
.
In terms of output, under the influence of high temperature and equipment maintenance season, the output of soda ash will decrease in the third quarter; the fourth quarter is the peak of production, and the output of "double control" due to energy consumption was relatively low last year.
Or lower than last year, soda ash production in the second half of the year is expected to be higher than the same period last year
.

　　In terms of demand, the production capacity of float glass is expected to be gradually released, and the continuous development of superimposed photovoltaic glass will drive the recovery of soda ash demand
.
The float glass enterprises downstream of heavy alkali still have expectations for the market, and the cost of cold repair is high, and the operating rate is likely to remain stable
.
The output of photovoltaic glass to be put into production is relatively large, and there are 9 lines with strong certainty, with a total daily melting capacity of 10,100 tons
.
At the same time, the newly added photovoltaic glass production capacity in the first half of the year will gradually reach production, and it is expected that the overall demand for soda ash in the second half of the year is expected to be higher than that in the first half of the year
.

　　However, the price transmission of most downstream industries of light alkali is not smooth, and it is difficult for the demand to change greatly
.
Among them, the operating rate of monosodium glutamate enterprises fluctuated slightly, vitamin C enterprises were regularly repaired in summer, some enterprises such as Paohua alkali and "two sodium" suffered losses, the export market was weak, and the operating rate and demand were difficult to improve significantly, while the output of lithium carbonate was higher than the same period of previous years.
, but due to the impact of raw materials and seasonal factors, the short-term production increase is limited
.

　　In terms of exports, the price difference of overseas chemical products has risen, and it is expected that China's soda ash export volume will exceed expectations throughout the year
.
Although the international market has cooled down, the quotations of ammonia caustic soda in Europe have increased, and the long-term orders for caustic soda in the United States and Turkey have been gradually delivered, the shortage of market supply has not been effectively alleviated.
It is expected that the export volume of soda ash in China will remain high in the second half of the year
.

　　On the whole, the growth rate of soda ash demand in the second half of the year is higher than the supply growth rate, the soda ash market may continue to be tight, and the industry inventory is expected to decline further
.
However, the profitability of the main downstream products of soda ash is not good, and the ability to bear the high price of soda ash is limited
.
At the same time, in the context of tightening liquidity in Europe and the United States, the soda ash market may be under certain downward pressure, but the overall price will remain relatively high
.

　　Liu Jingyu, Director of the Marketing Department of Shandong Haihua Group: Strong demand for export support

　　In the first half of the year, the price of soda ash rose to a high level in the same period mainly due to the tight balance between supply and demand
.
Downstream demand has improved and exports have surged while the supply side has dwindled
.

　　From the perspective of supply, domestic production capacity was slightly reduced, and output decreased year-on-year
.
From January to June, the domestic output of soda ash was about 14.
59 million tons, a decrease of about 150,000 tons compared with the same period last year
.

　　From the perspective of demand, glass just needs to form a strong support for the soda ash market
.
Float glass production capacity has been expanding since the second half of 2020
.
The high cost of cold repair is superimposed on the expectation of favorable policies for real estate.
At present, the daily melting volume of float glass is still at a high level
.
As of the end of June, the daily melting volume of float glass in production nationwide totaled 175,700 tons, an increase of 900 tons compared with the beginning of the year
.

　　The new capacity of photovoltaic glass exceeded expectations
.
As of the end of June, the daily melting volume of photovoltaic glass in production nationwide totaled 59,700 tons, an increase of 18,500 tons from the beginning of the year
.

　　Overall, the glass industry has become the main growth point of soda ash demand
.

　　In addition, the imbalance of supply and demand in the international market has led to a surge in China's net exports of soda ash, which also supported the rise of the domestic soda ash market
.

　　According to data from the General Administration of Customs, in the first half of the year, China's cumulative export volume of soda ash was close to 800,000 tons, an increase of about 330,000 tons year-on-year, while the cumulative import volume was only 90,000 tons
.

　　In addition, the futures market also leads the spot price increase in stages
.
At present, the futures platform has become an important supplement to spot sales, and point-of-sale trading and hedging have also become important tools for soda ash companies
.
Futures and spot arbitrage has become the main driver of short-term market conditions, and has a significant impact on the positive and negative feedback of the spot market
.
Under the support of the overall basic orientation of soda ash, the futures market rose at the beginning of the year, and the purchase of futures and spot merchants was active, which also became one of the important factors for the stabilization and rise of the soda ash spot market in the first half of the year
.