Soda Ash Prices in China Recovers Marginally on Concerns of Upcoming Supply Shortage

Contrary to the market expectations, Soda Ash prices in China have witnessed a gradual yet consistent recovery by nearly 2% in the last 3-4 days following the stress of abrupt supply shortage. The unexpected rebound is being perceived as a normalization to the sharp fall in prices of Soda Ash in the past few weeks. However, abrupt supply issues due to spate of turnarounds in the country have also stressed traders over the demand and supply gap in the longer run.

It was reported that on December 14, a company based in Anhui with a Soda Ash capacity of nearly 30000 MTPA imposed an indefinite maintenance turnaround. The next day, on December 15 another plant with a capacity of around 1.3 milllion MTPA in Henan was scheduled to a maintenance turnaround for a period of one week. Besides, another maintenance turnaround for over 2 weeks is expected in another company based in the same location. Under concerns of the upcoming supply pressure, other Soda Ash companies have continued to operate at around 85% rate.

Considering the demand for Soda Ash in China, it already reached its bottom in early December. Bearish buying activities have caused a major demand and supply imbalance in the Chinese Soda Ash market. As per the reported statistics, at present overall consumption of Soda Ash is nearly 70% of the total output.

In the near term, as the manufacturing of photovoltaic cell is highly uncertain and demand from the glass segments is also weak, Soda Ash consumption is likely to fluctuate in a stable to narrow range.  As per ChemAnalyst, ‘Due to the low consumption rate of Soda Ash, prices might recover marginally due to the prevailing supply crises, but a significant recovery is highly uncertain till a month or two.