Soda ash: supply and demand will remain tight throughout the year

In 2021, the soda ash market will maintain a high degree of prosperity.

Limited production capacity

In 2022, although the soda ash industry has plans to increase production capacity, due to environmental protection indicators, resource drainage and other restrictions, there are many uncertainties about whether the production capacity can be put into production on schedule after the completion of production capacity, so the supply increment is limited

In 2021, affected by many factors such as floods, repeated epidemics, power cuts, and "double control" of energy consumption, the annual production capacity of soda ash will be low, and the first negative growth since 2016 will appear

Entering 2022, new production capacity is still very limited

Demand is expected to rise

In terms of downstream demand, the demand for photovoltaic glass is improving.

On the one hand, the demand for photovoltaic glass is picking up

According to preliminary calculations from relevant data, the daily melting volume of photovoltaic glass planned to be put into production in 2022 is expected to exceed 40,000 tons, and it is conservatively estimated that a production capacity of 20,000 tons per year will be completed, which is expected to bring more than 1 million tons of demand for soda ash

　　In addition, in terms of flat glass, although there is a negative expectation of cold repair of production lines, it will still maintain a certain demand

　　In the new energy sector, the long-term demand for soda ash is obviously driven

　　Year-round ups and downs

　　Regarding the annual trend of the soda ash market in 2020, many institutions predict that the soda ash market will face pressures such as high construction, high inventory, and high profits at the end of 2021, resulting in a bad start to the year.

　　In terms of inventory, after November last year, the soda ash market accelerated the accumulation of inventory, and by the end of December, the inventory of enterprises reached 1.

　　Guotai Junan Futures also believes that in the first half of the year, in the case of high glass inventory, there may be a short-term replenishment and rebound, it is difficult to rise, and it tends to fluctuate

　　To sum up, on the one hand, photovoltaic glass drives consumption to continue to grow rapidly; on the other hand, the production capacity of soda ash decreased after the shutdown of Lianyungang Soda Industry last year.