Market analysis report on soda ash (sodium carbonate)
Sodium carbonate is an inorganic compound with the chemical formula Na2C03 and a molecular weight of 105.99. It is also known as pure alkali, but classified as a salt and not a base. In international trade, it is also known as soda or alkali ash. The appearance is white crystalline powder, which is an important inorganic chemical raw material mainly used in the production of flat glass, glass products, and ceramic glaze. It is also widely used for daily washing, acid neutralization, and food processing.
China's soda ash exports are mainly sold to Northeast Asia, Southeast Asia, Africa, Australia and other regions. In 2019, the main export countries of China's soda ash were South Korea, Bangladesh, Indonesia, Vietnam, Thailand, the Philippines, Nigeria, etc. South Korea, Bangladesh, and Indonesia import relatively large amounts of soda ash, but are relatively sensitive to import prices. Europe has become the epicenter of this public health incident, but domestic soda ash exports are basically not sold to the European region.
Starting from March 20, 2020, increase the export tax rebate rate of sodium carbonate (soda ash) products to 13%; Increase the export tax rebate rate of sodium bicarbonate (baking soda) to 13%.
According to customs data, in terms of export volume, the export of caustic soda in September 2023 was about 56100 tons, a year-on-year increase of -71.71% and a month on month increase of -48.03%, accounting for approximately 2.31% of the national production of 2.435 million tons in September; From January to September, the cumulative export volume was about 1.2784 million tons, a year-on-year increase of -11 81%. (2) From the perspective of average export prices, the average export price of China's soda ash in September 2023 was about 2085 yuan/ton, a year-on-year decrease of 20.73% and a month on month increase of 10.69%; Export prices have increased significantly month on month. (3) From the perspective of exporting countries, the top five countries in September for the export of pure alkali in China were South Korea, Vietnam, the Philippines, Malaysia, and Australia, accounting for 28.09%, 9.13%, 8.10%, 6.81%, and 6.60% of the total export volume, respectively.
On the supply side, there is still room for an increase in operating rates despite the significant increase in new production capacity. (1) Stock production capacity: The global soda ash production capacity is about 76 million tons, of which China's production capacity is 36.8 million tons. According to Baichuan Yingfu, as of October 20, 2023, the operating rate of China's soda ash industry was 87.88%, which is at a historical normal level and still has some room for improvement. (2) New production capacity: The first phase of the 5 million ton soda ash project of Yuanxing Energy Alxa has been put into operation with 3 million tons, and there are still 2 million tons of production capacity planned to be put into operation in the future. Overall, the supply side of caustic soda tends to be loose.
Demand side: Overall demand is stable and improving. (1) In terms of domestic demand, although the monthly production of flat glass shows a slight downward trend, the performance of photovoltaic glass is strong, which supports domestic demand. Specifically, in September, the flat glass and photovoltaic glass were approximately 4.05 million tons and 1.99 million tons respectively, with a year-on-year increase of -5.00% and+40.50%, and a month on month increase of -1.47% and+6.94%. (2) In terms of external demand, due to the marginal weakening of overseas energy high enterprises, the export volume of soda ash has declined compared to 2021. The cumulative export volume from January to September of 2023 was about 1.2784 million tons, a year-on-year increase of -11.81%, but it is still at a relatively high level in the past five years outside of 2022.
