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Asian Soda Ash Market Faces Weak Demand and High Inventory Pressure
Asian Soda Ash Market Faces Weak Demand and High Inventory Pressure

Asian Soda Ash Market Faces Weak Demand and High Inventory Pressure

  • 27-Aug-2024 2:37 PM
  • Journalist: Jacob Kutchner

The Asian Soda Ash market remained under significant Southward pressure in the week ending August 23, 2024, as market volatility persisted, and key indexes reflected a broad downturn. The on-site production capacity utilization rate remained high, ensuring ample market supply. However, the downstream market continued to exhibit weakness, with expectations of cold repair looming. Insufficient demand support has led to sluggish shipments from Soda Ash enterprises. In the short term, the Soda Ash market is expected to remain weak and stable.

The supply-demand imbalance in the Soda Ash market has intensified, driven by significant shifts in demand. Notably, the accelerated elimination of outdated photovoltaic glass production capacity has led to a marked decline in alkali demand for this segment. As a result, overall demand for Soda Ash has diminished, along with falling demand and increased stock availability weekly. This persistent oversupply has pushed inventory levels to new highs for the year, further straining market conditions.

In the glass sector, fundamentals remain lackluster, with weak downstream demand exacerbating the surplus situation. High inventory levels and evident price pressures have compounded the challenges. Thus, the dynamic cost support line for glass has been on a downward slope, indicating a continued period of weakness and volatility for the sector in the coming weeks.

With supply easing and demand faltering, the Soda Ash market is expected to continue its bottom-out volatility, with prices likely to remain subdued. The weak fundamentals in the glass sector, coupled with ongoing supply-side pressures, suggest that the market will struggle to find stability in the near term. Thus, the market sentiment remains cautious, with confidence in the demand outlook still lacking, particularly as the real estate sector remains in an adjustment phase in the APAC region during this week. In the short term, the market is expected to remain highly competitive, with Soda Ash prices potentially experiencing stability, and any gains are likely to be modest.

As per ChemAnalyst, with ample supply and high inventory levels at both enterprise and market levels, the Soda Ash market outlook remains cautious in the Asian market. The underperformance of the Soda Ash futures market in recent stages has further dampened market confidence, leading to generally bearish sentiment in the spot market. The regional producers are trying to stabilize Soda Ash prices in August, as margins need improvement, but the current glass industry demand in August is not supportive of these efforts in the Soda Ash market.

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