The supply and demand structure continues to be weak, and the soda price fluctuates at a low level

Summarize

Recent increases in soda ash supply have dampened market sentiment, and with no significant changes in demand, spot prices have steadily declined. Currently, the negotiation focus in the Shahu area is at 1250-1300 yuan per ton. In the short term, with fewer maintenance facilities, supply is expected to remain high and volatile. Inventories have not been effectively reduced, and downstream demand remains at a basic level. With the market lacking positive news, caution is advised.

Recent soda ash market concerns:

1. This week, the domestic soda ash output was 704,100 tons, +2.78% month-on-month.
2. This week, soda ash capacity utilization rate was 80.76%, +2.19% month-on-month.
3. This week, the national float glass output was 1097,900 tons, -0.56% month-on-month.
4. This week, the national photovoltaic glass production capacity was 691,500 tons, unchanged from the previous month.

5, this week soda ash enterprise inventory 1627,000 tons, up 0.27 million tons compared with last Thursday, up 0.17%.

1. Demand is tepid, soda ash price fluctuates downward

This week, the domestic soda ash market has seen a downward trend, with prices declining. In the Shahu area, soda ash prices fluctuate between 1250 and 1300 yuan per ton. Previously shut-down facilities have resumed operations, bringing production back to around 100,000 tons, keeping supply at a high level. On the cost side, the price of raw salt has stabilized, but coal prices continue to decline, weakening the cost support. Downstream demand remains stable, mainly focused on restocking to meet basic needs, with low-price transactions being the norm.

From the supply and demand perspectives of heavy soda ash, the production of heavy soda ash within the week reached 382,200 tons, up 12,500 tons or 3.39% from the previous week. The weekly production of float glass was 1,097,900 tons, down 5,600 tons from the previous week. The national production capacity for photovoltaic glass was 691,500 tons, unchanged from the previous week. With soda ash production increasing and glass demand stabilizing or slightly declining, the supply increase significantly exceeded demand, leading to an expansion in the inventory buildup due to the supply-demand gap for heavy soda ash.

Table 1 Weekly supply and demand balance of heavy soda ash in China

Second, the maintenance intensity is weak, and the supply of soda ash is expected to increase

Prediction: This week, soda ash plants will gradually recover, and only a few enterprises will continue to reduce the burden of operation, and the supply will hover at a high level. In June, the maintenance of soda ash is expected to be less, and the supply is expected to hover at a high level.

1. The early maintenance was gradually restored, and the supply remained high

This week, soda ash production facilities underwent adjustments and fluctuations. Supply increased due to the resumption of operations at Jiangsu Shilian, Hubei Shuanghuan, Yingen Chemical, and Inner Mongolia Chemical. Henan Junhua reduced its output and volume, leading to an overall increase in supply. Additionally, facilities such as Shandong Haitian, Southern Alkali Industry, Tangshan Sanyou, Anhui Debang, Lengshuijiang, and Gansu Jinchang continued to operate with reduced capacity. Soda ash production for the week reached 704,100 tons, up 19,100 tons from the previous week, representing a 2.78% increase.

Next week, some maintenance enterprises will resume, and there is no new maintenance plan. There are few maintenance devices. It is expected that the supply of soda ash will increase next week, with estimated output of 740,000 tons and operating rate of 85+%

Table 2 Weekly soda ash production by region in China

2. Enterprise inventories remain high

The soda ash inventory has been adjusted to a high level within the week, with companies generally receiving new orders and primarily focusing on early shipment orders, maintaining a high concentration of inventory. As of June 5, 2025, the total inventory of domestic soda ash manufacturers stood at 1,627,000 tons, an increase of 27,000 tons from last Thursday, representing a 0.17% rise. Specifically, light soda ash was 790,000 tons, down 28,300 tons from the previous week, while heavy soda ash was 837,000 tons, up 31,000 tons from the previous week. Compared to the same period last year, the inventory was 809,900 tons, an increase of 817,100 tons, or 100.89%.

Recently, the soda ash market has been fluctuating at a low level, and the transaction of futures and spot merchants is good. The downstream replenishment is moderate and low price, and the inventory of delivery warehouses is fluctuating downward. As of June 5, the inventory of delivery warehouses is 345,100 tons. The inventory of traditional traders is not high, and they basically maintain the purchase of just-in-time goods.

3. Orders to be issued increased in a narrow range

Within the week, soda ash orders to be shipped increased in a narrow range. At the beginning of the month, new prices were introduced, and downstream enterprises replenished their inventory appropriately. As of June 5, soda ash orders to be shipped were 11.44 days, 2.51 days more than last week.

Third, glass inventory is high and procurement remains in demand

Prediction: The downstream glass industry is expected to experience a minor adjustment. Within the week, two float glass production lines will be shut down for maintenance, and one line will be ignited. However, the ignited line will not produce any glass at this time, leading to an overall decrease in supply. Photovoltaic glass production is expected to remain stable, with no significant fluctuations in production lines. Next week, one float glass production line is expected to undergo cold repair, while two lines are scheduled to be ignited. Photovoltaic glass production is expected to remain stable, with a reduction in production lines anticipated by the end of June or early July.

1. The downstream market is volatile and adjusted

 explain ：

Unit price: yuan/ton

Production cycle: Weekly production (from Friday last week to Thursday this week)

Full cycle operating rate: weekly operating rate (from last Friday to this Thursday)

Quotation area: East China market

Glass price area: national average price

As of June 5, 2025, the theoretical profit (dual tons) for China's double soda process soda ash was 178 yuan per ton, a decrease of 37 yuan per ton from the previous period. During the week, the price of raw salt remained stable, while the price of thermal coal saw a slight decline, leading to a downward trend in overall costs. As soda ash production facilities gradually resumed operations, supply is expected to increase, causing prices to fall and the theoretical profit for the double soda process to fluctuate downward. The theoretical profit for China's ammonia-soda process soda ash was 49.90 yuan per ton, a decrease of 17.30 yuan per ton from the previous period. During the week, the price of sea salt remained stable, while the price of anthracite coal slightly decreased; the slight decline in soda ash prices led to an overall fluctuation in profits.

According to the production cost calculation model by Longzhong Information, the average weekly profit for float glass using natural gas as fuel is-170.68 yuan/ton, a decrease of 2.71 yuan/ton from the previous week; for float glass using coal gas as fuel, the average weekly profit is 90.96 yuan/ton, a decrease of 9.14 yuan/ton from the previous week; for float glass using petroleum coke as fuel, the average weekly profit is-111.33 yuan/ton, a decrease of 4.29 yuan/ton from the previous week.

2. The downstream production line is moving down steadily

Float glass: Next week, there are expectations of both production line ignition and water storage. Although more lines are expected to be ignited than stored, the process from ignition to glass production still requires time, leading to a reduction in expected output. On the demand side, downstream performance is lukewarm, with most processing plants unable to fill their orders, mainly dealing with scattered orders. The purchase of raw glass remains at a basic level. Raw glass companies' inventories are at their highest levels in recent years, and with weak demand, the continuous resumption of production lines has led to a decline in market prices as companies reduce inventory. It is expected that the spot market price of float glass will continue to be weak next week.

This week, the supply of photovoltaic glass remained stable, with no new production lines being launched or cold repairs. On the demand side, the number of downstream orders was low, leading to an increase in industry inventory. Coupled with a pessimistic outlook for the future, some photovoltaic glass companies began to cut prices and accelerate sales, causing the market price at the New Moon Market to drop from the May settlement price. It is expected that next week, the photovoltaic glass market will see a gradual reduction or shift in production, indicating a downward trend in supply. In the short term, the demand side is unlikely to provide favorable support, putting pressure on company inventories. Prices are expected to remain low in June.

Table 3 Weekly consumption comparison of downstream heavy soda ash

3. Downstream float glass inventory fluctuates upward

As of June 5, 2025, the total inventory of float glass sample enterprises nationwide reached 69.754 million weight boxes, an increase of 2.092 million weight boxes from the previous period, representing a 3.09% increase from the previous period and a 20.15% increase from the same period last year. The inventory days were 31.3 days, up 0.9 days from the previous period. This week, most enterprises in North China have slowed their shipments, and dealers' purchasing enthusiasm has weakened. The Dragon Boat Festival holiday has also contributed to the increase in factory inventory. This week, the float glass market in East China has seen a significant rise in inventory. The Dragon Boat Festival holiday coincided with most processing plants being on leave, which significantly impacted enterprise shipments and made it difficult for overall production and sales to balance. In Central China, the daily production and sales performance this week was mixed. In the first half of the week, due to holiday factors, production and sales were weak. In the second half of the week, local demand replenishment and price concessions by original plate enterprises helped improve production and sales for some enterprises. In South China, the Dragon Boat Festival holiday affected most downstream enterprises, which were on leave for 2-3 days. Overall, enterprise shipments were poor. However, after the holiday, some enterprises improved their shipments, but overall regional inventory still increased slightly. In Northeast China, the Dragon Boat Festival holiday affected most enterprises, and most shipments were poor. After the holiday, with price reductions by enterprises, shipments improved, but overall, regional inventory continued to increase. This week, the accumulation of float glass inventory in Southwest China increased. During the Dragon Boat Festival holiday, most local deep processing enterprises were on leave for 1-2 days, leading to slow production and sales of original plates. After the holiday, with the start of the month and price concessions by enterprises, production and sales recovered to pre-holiday levels, but industry inventory still increased. In Northwest China, overall shipments were average. Influenced by falling prices in surrounding markets, buyers were cautious, and enterprise shipments varied, but overall regional inventory increased.

Fourth, short-term soda ash shock is weak

Table 4 Domestic supply and demand of heavy alkali forecast

Supply: the quantity of the device is gradually increased and the supply remains high

It is expected that the domestic soda ash supply will be adjusted at a high level next week, and the devices of Shandong Haihua and Jiangsu Huachang will face the resumption of operation. There is no obvious maintenance device for the time being, and the supply is expected to rise. Next week, the output will be around 740,000 tons, and the capacity utilization rate will be more than 85%. In June, only Zhongyan Kunshan and Chongqing Xiangyu are expected to be under maintenance.

Demand: stable demand and continuous use and purchase

The downstream glass industry has a stable consumption performance. Float glass has a production line storage water plan, and the profit level of glass itself is low, so the purchasing mood for raw materials is relatively cautious. At present, the soda ash inventory level is at a high level, and with sufficient supply, the downstream purchasing mood is not active, and it continues to be mainly replenishment of the demand.

In general: in the short term, soda ash supply is stable and rising, while demand lacks favorable support, maintaining the need for replenishment, the market continues to supply strong and weak demand, and the trend of soda ash is expected to be weak.

Risk warning: soda ash inventory situation, plant maintenance and downstream production line fluctuations.