Light alkali downstream demand increases, soda ash inventory decreases, soda ash fluctuates in a narrow range under upstream and downstream game

of yuanxing Energy Trona Project was ignited on May 20, triggering the closure of the soda ash multi-contract on May 22. The products put into production will not come out until one month later, but the price drop is accompanied by the market dumping, and the soda ash inventory accumulates ahead of time. Therefore, the market's pessimistic expectation of excess supply is stronger after the new production capacity is put into production in the later period. Soda ash falls sharply, and the mentality of buying up and not buying down intensifies the decline of soda ash futures and spot. However, after falling sharply to 1600 in a short period of time, the cost line of ammonia-soda method was broken, and the exchange issued three consecutive policies in a week, including the second fee and the first margin, to curb excessive speculation. Short-term low fear of a rebound, high empty sheet below 1600 stop profit to leave, pay attention to the rebound height, rebound to a high level after continuing to sell short. Downstream float glass and photovoltaic glass are just needed, and the profit margin of the industry has increased rapidly after the soda ash crash. Later, attention was paid to the resumption of production of float glass and the ignition of photovoltaic glass. The recent rise in glass inventory triggered a decline in futures prices. At present, due to the extremely low inventory of raw materials in the glass factory and the overhaul of soda ash in summer, there is still speculation on soda ash in recent months. We should pay close attention to the production progress of the first phase and the second phase of the production of soda ash of yuanxing Energy, the data of import and export soda ash and the resumption of production of downstream glass. Those who participate in hedging at a high level in the early stage can continue to hold it.

1. Market

Review Soda ash SA309 fluctuated at a low level this week. After rebounding at a low level last week, it faced the pressure of the 20-day moving average and 1776. After rising to 1749, it fell back. In the short term, it continued to oscillate around the range of 1500-1776. The overall downward trend remains unchanged, but it has rebounded after the overfall in recent months, with sharp fluctuations, so it is not appropriate to chase orders. In the early stage, it is suggested that all the high empty orders below 1600 should continue to wait and see. Pay attention to the height of this rebound, wait for the opportunity to continue to increase positions after the rebound, and the strategy of short selling at high prices remains unchanged in the medium and long term. SA309, the hedger, will continue to hold empty orders above 2500. This month, the domestic soda ash spot market was stable and good, trading was still acceptable, and the focus of trading stopped falling and stabilized. This week, the overall start-up load rate of soda ash manufacturers remained at a medium and high level, and the supply of goods was sufficient, but the profit margin continued to narrow, and the price sentiment of manufacturers was strong. During the week, the new single price of light alkali of integrated alkali manufacturers in the central and eastern regions increased by 100-150 yuan/ton, and some users in the middle and lower reaches of low inventory were replenished appropriately. The shipment of light alkali of soda ash manufacturers was better, and the inventory decreased significantly. Heavy alkali downstream just need to be good, but the float glass market trading in general, the price of soda ash sentiment is not reduced, insist on just need to purchase, the market supply of low prices has been reduced. This week, the terminal price of heavy alkali mainstream is 2000-2300 yuan/ton. The SA309 basis, the main force of soda ash futures, did not change much.

2. Supply and demand situation

(1) Supply situation

1. In April 2023, the import of soda ash was 32,900 tons, with an average import price of 304.80 US dollars/ton. In January-April 2023, the import of soda ash was 80,300 tons, an increase over the same period last year. Imports of about 100000 tons of arrival volume, affected by the shipping schedule, some delays, or lead to loose supply in the market in May. Before the production of yuanxing Energy, the supply of soda ash has maintained the highest level over the years. In April

2023, the export volume of soda ash was 177,400 tons, with an average price of US $367.14/ton, an increase of 8.84% on a month-on-month basis and an increase of 17.07% on a year-on-year basis. From January to April 2023, the total export volume of soda ash was 628,200 tons, an increase of 35% on a year-on-year basis. The export of soda ash remained good.

2. On June 8, the operating load rate of soda ash industry this week was 89.4%, which was 0% lower than that of last week. The operating load rate of ammonia soda manufacturers was 94.3%, and that of combined soda manufacturers was 84. It was still at the high level of operating rate over the years. The output of soda ash this week is estimated to be about 600,000 tons. In June, Shandong Haihua old line was planned to be overhauled, involving 1.2 million tons of production capacity, which had an impact on short-term supply.

3. As of June 8, the total inventory of domestic soda ash enterprises was 427000 tons (including the port and external warehouse inventory of some manufacturers), a decrease of 40000 tons, a decrease of 8.5%, an increase of 1.7% over the same period on June 1, of which the heavy alkali inventory was 233000 tons, an increase of 1. Some manufacturers control orders, and the inventory of light alkali has decreased significantly.

photovoltaic glass, under the background of global "carbon peak, carbon neutralization", the energy transformation of various countries is accelerating, the installed capacity of photovoltaic industry is still expected to be better, and the rapid production capacity of photovoltaic glass industry is mainly related to domestic policies. From the perspective of the country's vigorous development of

3. Several key factors affecting

the trend of soda ash in the later period:

1. Domestic COVID-19 optimization and liberalization and a number of favorable real estate policies, the implementation of RRR reduction and stable delivery policies, the recent interest rate cuts, the continuous introduction of real estate policies around the country, the signs of rapid economic recovery are obvious, but the growth rate is not as good as expected. The external environment is bad and the domestic economic recovery is intertwined, which aggravates the volatility of commodities.

2. The supply of goods in the market is expected to increase, but June-August is the traditional peak season for maintenance in the soda ash industry. It is expected that the number of maintenance devices will increase, and the start-up load rate may decline. The downstream rigid demand of heavy alkali is expected to continue to improve, and the start-up load of some downstream industries of light alkali at a high level in summer may decrease. The downstream procurement of soda ash may be mainly based on rigid demand, and attention should be paid to the impact of the actual comparison between new production capacity and maintenance volume, especially the performance of inventory changes.

3. The nine-month loss of glass has ended in April 2023, and the current profitability is good, which may have an impact on the glass maintenance and resumption plan, thereby increasing the supply of glass. We will continue to pay attention to the changes in the daily melting volume of float glass and photovoltaic glass, as well as the ratio of production to sales and inventory of glass.

Fourth, in terms

of technology, soda ash SA309 fluctuated at a low level this week. After rebounding at a low level last week, it faced the pressure of the 20-day moving average and 1776. After rising to 1749, it fell back. In the short term, it continued to oscillate around the range of 1500-1776. The overall downward trend remains unchanged, but it has rebounded after the overfall in recent months, with sharp fluctuations, so it is not appropriate to chase orders. In the early stage, it is suggested that all the high empty orders below 1600 should continue to wait and see. Pay attention to the height of this rebound, wait for the opportunity to continue to increase positions after the rebound, and the strategy of short selling at high prices remains unchanged in the medium and long term. SA309, a hedger, continues to hold empty orders above 2500.

Fifth, the market outlook for

the Bank of America thunderstorm, the Federal Reserve had to raise interest rates by 25 basis points in March and 25 basis points in May under the pressure of inflation, the US debt default negotiations were reached, and the external bad news slowed down slightly. Domestic recent interest rate cuts, real estate stimulus policies continue to be introduced, but the economic recovery is not up to expectations, domestic and foreign economic game; The demand was released one after another, the glass inventory rebounded after a rapid decline, the voice of glass became stronger, the price of soda ash was lowered, the inventory accumulated under the high operating rate of soda ash, the profit declined rapidly, the disk broke through the cost line of ammonia-soda process, with the release of downstream demand for light alkali, the inventory decreased, and the soda ash manufacturers had a strong willingness to stand up. yuanxing Energy Ashan trona was put into production as scheduled and produced products in July. The tight supply and demand situation of soda ash has changed. After the futures fell sharply, a large number of low-price sources appeared, which has a certain guidance for the spot.

However, at present, the raw material side of the glass factory has a very low inventory, plus the traditional overhaul season of soda ash from June to September, focusing on the impact on the actual supply and demand and inventory of soda ash under the hedging of new production capacity and actual overhaul. SA2309 above 2500 can continue to be held when it intervenes in hedging at high prices. Short-term regulatory policies restrain speculation. Speculators stop profit and leave below 1600 after a sharp fall. At present, the price has broken through the cost line of ammonia-alkali method, so it is not appropriate to chase short. After the market pessimism is restored and rebounded, it will continue to add short, and the strategy of short selling at high prices will remain unchanged.