According to the Commodity Analysis System of Business Society, the overall price of soda ash in 2023 is in a “W” shape. At the beginning of the year, the average market price of soda ash was 2648 yuan/ton, and at the end of the year, the price of soda ash was 2790 yuan/ton, with a price increase of 5.36%.

Take a look at the comparison chart of soda ash prices: The annual price comparison chart of Business Society shows that the price of soda ash in 2023 is at a relatively low price level. Can soda ash operate strongly in 2024?

Firstly, let’s take a look at the specific price trend of pure alkali in 2023. Prices increased from January to mid March, decreased from the end of March to the end of May, increased from early June to mid to late September, decreased from the end of September to late October, increased from early November to mid December, and stabilized after mid December.

Price increase stage from January to mid March: After the Spring Festival, the supply of soda ash is relatively stable, and downstream glass is mostly purchased according to demand, resulting in a relatively balanced supply and demand of soda ash. From the end of March to the end of May, prices fell. From the supply side, data shows that the inventory of soda ash manufacturers has increased from 250000 tons to 520000 tons, and the overall operating rate of soda ash is around 90%. There are currently no new maintenance plans, and the supply of soda ash has increased. The downstream demand for glass is average, and the price of soda ash has decreased. From early June to mid to late September, prices increased, while the price of soda ash increased. Soda ash enterprises are undergoing maintenance, and the maintenance plan exceeds expectations. The supply of soda ash is slightly tight, and upstream soda ash manufacturers have the initiative. Prices have continued to rise, while downstream companies can only accept significant price increases. From the end of September to the end of October, prices fell, and the price of soda ash operated weakly. Mainly due to the recovery of the soda ash plant and the restoration of supply. Moreover, downstream imports of soda ash have increased, resulting in a decrease in soda ash prices. From early November to mid December, prices rose, and the price of soda ash remained strong. Recently, the production of soda ash has remained at around 84%, and the amount of soda ash has decreased in the short term. Soda ash manufacturers have continued to raise prices. After mid December, prices have stabilized, and data shows that there were around 350000 tons of pure alkali inventory during the week, and downstream purchases were made on demand.

What is the trend of pure alkali in 2024, despite the ups and downs in 2023?

From a supply perspective, according to data from the National Bureau of Statistics, the cumulative production of soda ash from January to November 2023 was 29.575 million tons, a year-on-year increase of 9.5%. The expected annual production is around 32.4 million tons, an increase of about 11% compared to 2022. The production in 2024 is expected to reach over 36 million tons according to the plan, with an increase of over 3.5 million tons. Firstly, all three lines of Yuanxing Energy Phase I and Jinshan Phase V will be completed, while the ignition and commissioning of the fourth line will be postponed until 2024. Lianyungang Alkali Industry is expected to start production with 1.2 million tons in the second half of 2024. It is expected that the new production capacity will be limited in 2024, but the new production will be relatively large.

In terms of inventory, the overall inventory of soda ash in 2023 was at a low level in previous years, with an extremely low inventory of less than 500000 tons throughout the year. Especially during the maintenance season from August to September, the lowest inventory reached a historical low of around 130000 yuan. From the inventory, it can be seen that there was no serious overcapacity in 2023 for soda ash, but rather a shortage of supply. With the release of production capacity, it is expected that the total inventory of soda ash will exceed 3 million to 4 million tons in 2024, indicating significant supply pressure.

In terms of imports and exports: According to data from the National Bureau of Statistics, the cumulative import volume from January to November 2023 was 617500 tons, an increase of 505100 tons compared to the same period last year, with a growth rate of 449.38%; The cumulative export volume from January to November 2023 was 1.4036 million tons, a decrease of 462300 tons or 24.78% compared to the same period last year. In 2023, the import volume of domestic soda ash was relatively small, while the export volume increased significantly, mainly due to the rising price difference between domestic and foreign markets. From the current price difference between domestic and foreign markets, there is still an expectation of imports for domestic clothing, as the price of caustic soda has decreased and the downward pressure on spot prices has increased. In 2024, there may be less imports of caustic soda and more exports.

In terms of demand: In 2023, the demand for soda ash will maintain a rapid growth, mainly affected by the increase in photovoltaic glass production. Although the real estate industry is in a downturn overall, under policy guidance, the completed area from January to November increased by 17.9% year-on-year. Perhaps the growth rate of domestic housing completed area in 2024 may turn negative. However, in the case of guaranteed delivery in the real estate market in 2024, glass has a rigid demand for soda ash, and the possibility of reducing the quantity of float glass is unlikely.

Comprehensive prediction: Business Society analysts believe that the supply side will maintain a loose situation, and the production of soda ash will continue to increase in 2024. Inventory will also exceed 3 million tons or about 4 million tons. In terms of imports, there may be less imports and more exports in 2024. Downstream glass has a rigid demand for soda ash, and prices in the second half of the year may be better than those in the first half. It is expected that the price of soda ash will first decrease and then increase, depending on downstream market demand.