Supply-Demand Imbalance Keeps Soda Ash Prices Steady in Asia and USA by Late July
Supply-Demand Imbalance Keeps Soda Ash Prices Steady in Asia and USA by Late July

Supply-Demand Imbalance Keeps Soda Ash Prices Steady in Asia and USA by Late July

  • 31-Jul-2024 8:31 PM
  • Journalist: Harold Finch

The recent stability in Soda Ash prices across Asia and the USA during the latter half of July 2024 is attributed to ongoing market turmoil, driven by a persistent imbalance between supply and demand. On the supply side, the Soda Ash industry is undergoing a major capacity expansion. Even during the traditional summer maintenance period, production has remained steady. The weekly output of Soda Ash in July consistently reached a historical high in Asia.

Conversely, demand continues to be weak in Asia. The largest downstream products of Soda ash, float glass, and photovoltaic glass, have seen sharp price declines, leading to the shutdown of some production lines. This decline in demand has resulted in a rapid accumulation of Soda Ash stocks. By July 29, the total inventory of domestic Soda Ash manufacturers exceeded approximately 1 million tons.

This imbalance between supply and demand has led to a continuous decline in Soda Ash prices as the expansion of production capacity has created a loose supply-demand pattern, causing Soda Ash plants to accumulate inventory. The spot market has also been impacted. Some futures and spot traders are even offering lower prices, further exacerbating the market's pessimistic sentiment in Asia.

In light of the persistent imbalance, Soda Ash prices are expected to remain under pressure in the USA. Although downstream companies are more willing to accept low-priced supplies, the overall market sentiment remains cautious. The Soda Ash prices in the US market stabilized in the second half of July 2024, driven by reduced production rates and higher selling costs in the export market. Limited inventories and a shortage of containers, along with slowed production rates, have contributed to the price surge. Hurricane Beryl has halted industrial Soda Ash production in the USA, while floods have disrupted downstream demand in the glass manufacturing sector.

As per ChemAnalyst, the Soda Ash prices in the US and Asian markets are anticipated to decrease in August 2024, due to expected low demand in the glass industry. Hurricane Beryl is likely to affect the downstream production in the USA, with floods further disrupting manufacturing activities in the glass sector. At the same time, Asian Soda Ash prices are also likely to show a plunge amid low downstream demand in the glass industry and increased levels of inventories. The imbalance between supply and demand in the Soda Ash market will be challenging to effectively address in both the regions, USA and Asia in the short term.

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