When will the turning point of soda ash inventory come?

When will the low inventory of

soda ash be traded? When will the turning point of soda ash inventory come?

Since heavy alkali is traded in futures, we will focus on the situation of heavy alkali today. In the following, I will analyze the balance sheet of heavy alkali in detail, hoping to show you the deduction results, and also help you to deepen your understanding of the fundamentals of soda ash from the deduction process.

We know that there are two kinds of downstream demand for heavy alkali, float glass and photovoltaic glass. This year, due to the strong expectation of real estate recovery and the successive price increases on the spot side of glass, the loss margin of glass has been reduced, and the production profit of petroleum coke glass has turned positive, taking into account the objective demand of the production line of cold repair in the first half of last year. Therefore, on the whole, there is limited space for the daily melting volume of float glass to drop sharply this year. Recently, there are rumors in the market that a total production line of 2400t/d will be ignited in February.

Therefore, it is conservatively estimated that the average daily melting volume of float glass will be maintained at about 160000 tons this year. Therefore, in my balance sheet, the demand for float glass is calculated by 160,000 tons of daily melting.

In terms of photovoltaic glass, the current market is generally optimistic about the increment. Based on the views of various institutions, I take a compromise estimate of an annual increase of 36,000 tons, that is, a monthly increase of 3,000 tons. In terms of

soda ash production, according to the production plan of each enterprise, there is almost no increase in production capacity in the first half of the year, and the production is concentrated in the second half of the year.

According to the data of Longzhong Information, as of the week of February 2, the output of heavy alkali in China was 322,000 tons, while the consumption of heavy alkali deduced from the output of float and photovoltaic glass was 324,000 tons, with a gap of 2,000 tons per week. Considering all factors, I will give 1.4 million tons of heavy alkali output per month from February to June this year.

In the first half of the year, the balance of supply and demand of heavy alkali (10000 tons)

has gone to the extreme without considering the export. It can be said that from the perspective of the balance sheet, there is no solution to the contradiction of low inventory of soda ash in the first half of the year, and heavy alkali will continue to maintain the state of destocking.

Contradictions in the first half of the year are basically open at present, and there is not much divergence in the market. Considering that production capacity is concentrated in the second half of the year, what will the balance sheet be like in the second half of the year?

In the second half of the year, the dynamics of several important production lines are the key.

The first is the production rhythm of yuanxing Energy. Previously, the market reported that the production capacity of 5 million tons of yuanxing Energy would be in place by the end of June, but considering that the water consumption index has not yet been in place and the time period needed to put into full production, I calculated the production capacity of 1.5 million tons in July, 3 million tons in August and 5 million tons in September. In fact, this has been very optimistic. It may not be achieved in reality.

Considering that the current contradiction between supply and demand of heavy alkali is more prominent, the premium for light alkali is higher, and the new production capacity and heavy alkali rate should be higher, so I calculate the new heavy alkali output of yuanxing Energy from July to September according to the heavy alkali rate of 70%, which is 8.75, 17.5 and 291,000 tons respectively.

Another new production line is Lianyungang Debang Project, with an estimated capacity of 600000 tons, which will be put into operation at the end of June. According to the 70% heavy alkali rate, 35000 tons of heavy alkali will be added every month. The

third important production line is Jinshan Wuyang Project, with an estimated capacity of 2 million tons, which will be put into operation at the end of September. Based on 70% of the heavy alkali rate, the monthly output will increase by 116,000 tons.

In addition, considering that July-September is the overhaul season of soda ash, the output of the old production capacity has declined. According to the data of last year, the output of heavy alkali has declined from the high point of 330,000 tons/week to 240,000 tons/week, taking the median of 285,000 tons/week, it is estimated that the monthly output of the old production capacity from July to September is 1.22 million tons.

In this way, the balance sheet of heavy soda ash in the second half of the year can be obtained comprehensively: (unit: 10,000 tons)

The above derivation process has been optimistic about the new output, without fully considering the time period from production to full production of the enterprise. In fact, after the new soda ash line is put into operation, according to the operation of the equipment, It will take about three months to gradually reach full production, which will also have a greater impact on production. That is, the actual production will be less than balance sheet.

Considering that China's soda ash exports are mainly light alkali, according to friends in the industry, there will also be a small amount of heavy alkali exports in China in 2022, accounting for about 30%. Due to the lack of authoritative official statistics and the fact that the domestic price of heavy alkali has risen to the overseas price after a round of increase, it is estimated that the export volume of heavy alkali this year is not large, so the balance sheet does not give too much consideration.

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From the derivation of the above balance sheet, not only is there no solution to the contradiction of low inventory of soda ash in the first half of the year, but even in September, due to the loss of production in the maintenance season, which offsets a large part of the new capacity, the balance sheet of soda ash is still very tight, and the real relief will be after October. On the one hand, the new production capacity is constantly on line, on the other hand, the maintenance season is over, and the balance sheet will really ease. Therefore, we see the recent 09 contracts continue to strengthen, in addition, it is said that some people have begun to move from the 5-9 set to the 9-1 set.

In conclusion, when will the inventory turning point of soda ash come? About in winter .