The soda ash market in China experienced short-term uplift from increased demand from the photovoltaic (PV) glass industries during the week ending January 16, 2026. Market participants expect that there will be a surge in exports of PV glass due to VAT export rebate cancellations effective April 1, 2026, resulting in increased soda ash consumption. Exports of PV glass have already reached a very high momentum with PV glass producers expected to ramp up production to meet this new demand although the current PV glass production utilization levels are significantly lower than normal. Overall, the new VAT export rebate cancellation may provide a short-term boost in soda ash pricing but will not produce a sustained recovery in pricing.
In the near term, the soda ash market in China appeared to find some support during the week ending January 16, 2026, under the influence of the stronger demand from the photovoltaic (PV) glass sector. Cancellations with respect to the VAT export rebate for photovoltaic glass, with effect from April 1, 2026, have raised expectations that temporary “export rush” may provide the much-needed encouragement for Soda Ash market suffering from an oversupply situation.
This change in policy was formally declared on January 9, 2026, by the Ministry of Finance and the State Taxation Administration. Under the new regime, VAT export rebates for PV products would cease from April 1. Battery products would gradually see reductions in rebates throughout 2026, with rebates fully eliminated by 2027. Even though the policy mentions several types of glass, most affected items are those of processed glass, meaning direct impact on float glass supply remains limited on Soda Ash.
Nonetheless, an unusually busy first quarter may appear for the Soda Ash downstream industry. After all, that time around Chinese New Year is slow for many PV installations. However, with the impending ceiling on rebate, it's expected module exporters will catch up in shipments. This may boost demand for photovoltaic glass, which contributes over 10% to the costs of modules. Exports from China of 4.15 million tons of PV glass in January through November 2025, represent a significant year-on-year increase, attesting to the strength of the sector in Soda Ash exports.
PV glass is a key downstream consumer for soda ash, consuming about 0.2 tons of soda ash for every ton of glass produced. The PV glass industry is presently running at a low-capacity utilization rate of 66.31%. The expectations of increased exports may lead Soda Ash producers to ramp up output for a short time. With inventory levels being high and having more than two months' grace before the policy takes effect, manufacturers have space to adjust their activities. The expected increase in the production rate, even if temporary, will support soda ash pricing.
Nevertheless, the medium to long-term outlook is rather bleak. Weakening Soda Ash demand from float glass, another great soda ash consumer, is contending with challenges in the real estate sector. Exports contribute somewhat to relieving inventory pressures, but domestic stocks are at 1.56 million tons and mounting supplies due to increased operating rates amongst the major producers are not helping the situation.
As per ChemAnalyst, although the VAT rebate cancellation appears quite clearly to provide some temporary support for soda ash, the supply conditions remain strong and the moderate demand; therefore, any prospect for a sustaining price recovery in China's soda ash market would be limited.
