1. Market Review
Soda ash SA305 daily line continued to oscillate at a high level this week, with a range of 2900-3000, running around the 20-day average line as a whole, with obvious pressure on the support below 2900 and the 3000-point integer level, and the delivery price of 03 soda ash near 3030. 05 The momentum of the sharp rise is limited, but the support below is strong. After the sharp fall, the buying is obvious. The whole continues to oscillate at a high level, waiting for the next key guidance. Pay attention to the strong support at 2850 points below and the strong pressure at 3000 points at high level, and the range of high level is 2800-3000 for the time being.
In the early stage, it is suggested that soda ash manufacturers can choose the opportunity to hedge at the rising high level. SA2305, especially above 3000 yuan/ton, has a higher profit margin. At present, the profit margin of soda ash plants continues to rise, and the profits of soda ash plants are very rich. After the trona of yuanxing Energy was put into production in the third quarter of 2023, the decline in the profit margin of soda ash was a big probability event, so SA2305 above 3000 yuan/ton and SA2309 above 2600 yuan/ton could continue to be held.
This month, the domestic soda ash spot market continued to run at a high level, and the price difference between light and heavy alkali widened. This week, the operating load of soda ash manufacturers increased, the supply of goods increased, but the orders to be issued were sufficient, close to 21 days, the overall inventory declined, and the price sentiment was obvious. In March, the new order quotation of some manufacturers rose by 100 yuan/ton. The demand for heavy alkali has just improved, and the downstream demand for light alkali has not changed much, but the price difference between light alkali and heavy alkali is large, and some downstream purchases of light alkali have increased appropriately. As of March 2, the mainstream ex-factory price of soda ash manufacturers was 2650-2900 yuan/ton, and the mainstream delivery price of heavy alkali was 3080-3150 yuan/ton, up 50 yuan/ton from last week. Soda ash futures after the recent decline in the main, stable basis.
2. Supply and demand
(I) Supply
1. Output: the output of soda ash in December 2022 was 2.577 million tons, an increase of 4.4% over the same period last year, and the output of soda ash in January-December was 29.154 million tons, an increase of 0.2% over the same period last year; From January to December 2022, the import volume of soda ash was 113,800 tons, a decrease of 52.08% compared with the same period last year. Because the absolute value is too small, the impact can be ignored. From January to December
2022, the export volume of soda ash was 2.055 million tons, compared with 759,100 tons in the same period of 2021, with a year-on-year increase of 170.91%. Compared with the whole year of 2021, it increased by about 1.3 million tons. The reason for the significant increase in export volume in 2022 is the increase in overseas demand for soda ash, but there is no release of new overseas production capacity. At the same time, due to the impact of high energy prices, the start-up load of soda ash plants in Europe is insufficient, and the overall supply of overseas goods is tight. China's soda ash has become an effective supplement to the supply of overseas markets.
2. Operating rate: On March 2, the operating load rate of soda ash industry this week was 91.7%, which was 1.7% higher than that of last week. Under the high demand, the operating rate continued to maintain the high operating rate over the years.
3. Inventory
: As of March 2, the total inventory of domestic soda ash enterprises was 243,000 tons (including the port and external inventory of some manufacturers), with a decrease of 14.7% compared with February 23 and a decrease of 81.1% compared with the same period last year, of which the heavy alkali inventory was 79,000 tons. Decreased by 15,000 tons. The supply of heavy alkali continues to be tight, and the recent situation of some manufacturers receiving orders for light alkali has improved, and the inventory has declined.
(2) Demand
The downstream demand for soda ash is mainly float glass and photovoltaic glass. Float glass is mainly used in the real estate and automobile sectors, and the demand for glass assembly is mainly in the housing completion link; the policy of epidemic prevention liberalization, stable delivery of real estate and "three arrows" has been favorable, and the RRR has been lowered to support, which has boosted market confidence. 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 photovoltaic production capacity continues to increase rapidly, but at present, the profit of manufacturers is meager, and the actual progress of new ignition still needs to wait and see.
1. Float glass
In terms of float glass, due to the sluggish performance of the downstream real estate industry, the consumption of float glass was weak in 2022, and the inventory continued to accumulate. At the end of 2022, with the new epidemic prevention policy and the favorable real estate policy, the reduction of the reserve requirement ratio and the implementation of the "three arrows" of real estate, various provinces and municipalities have continuously introduced new real estate policies, boosting market confidence and improving demand. This week, the float glass market as a whole is still in general, and there are differences between the north and the south. During the week, the price in North China was weak, the price in Southwest China rose slightly, the price in other regions was basically stable, and the float plant shipped at a stable price, mainly waiting for demand repair. At present, the inventory of the downstream processing plants is small, and the inventory in some southern regions is low. It is expected that with the order repair and the digestion of the inventory of the downstream processing plants, the market trading is expected to be acceptable, or gradually improved. Pay attention to the turning point of the change of the inventory of the float plant. This week, the average price of float glass market was 1673 yuan/ton, with a ring ratio of -0.07% and a year-on-year decrease of 29.54%. As of last Thursday, there were 305 float glass production lines in China, 239 of which were in production, with a total daily melting capacity of 160130 tons, an increase of 600 tons over last week. Within a week, one production line is ignited to resume production, one is changed to production, and there is no cold repair temporarily. As of last Thursday, the total inventory of production enterprises in key monitoring provinces was 71.02 million weight boxes, an increase of 550,000 weight boxes over last Thursday, an increase of 0.78%, and the inventory days were about 36.53 days, a decrease of 0.23 days over last week. It is expected that with the warming of the weather, the situation of terminal orders will gradually improve, the overall demand may increase, and attention will be paid to the turning point of inventory changes in float mills.
2. Photovoltaic glass
In terms of 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, the rapid production capacity of photovoltaic glass industry is mainly related to domestic policies, and the country vigorously develops the photovoltaic power generation industry. There is a strong demand for photovoltaic installations. From the perspective of global PV installed capacity, the growth rate in 2022 will reach the highest point in recent years, with the installed capacity increasing by 38% from 170 GW in 2021 to 235 GW. In 2023, the installed capacity is estimated to be 260-275 GW, with a growth rate of 10-15%. The photovoltaic glass production line planned to be ignited in 2023 is concentrated. It is estimated that the daily melting volume of photovoltaic glass will increase by 20,000-30,000 tons in 2023, and the consumption of soda ash by photovoltaic glass will increase by 1.2-1.3 million tons.
By the end of February, there were 415 photovoltaic glass production lines in China, with a daily melting volume of 81380 tons per day, which was flat compared with the previous year, an increase of 86.61%. At present, the production capacity and inventory of manufacturers are on the high side, and the supply is sufficient. Moreover, some new production lines have ignition plans, and the supply shows a continuous increasing trend. From the same cost side, in view of the high prices of soda ash and natural gas, the profit margin of manufacturers is small, and some of them are in the loss stage. Overall, the current market supply is sufficient, the price is running at a low level, and with the advance of installation, trading is expected to improve slowly.
(3) Profitability
The profit margin of soda ash manufacturers remained high this week. Coal prices rose during the week, and the production cost of soda ash increased. The price of soda ash continues to rise, the ammonium chloride market has not changed much, and the profitability of soda ash plants is considerable. The profit of combined alkali enterprise is 1300. At present, the loss of float glass is still large, since June 2022, it has continued to lose money, the gross profit rate is still around -150 yuan/ton, the profit of photovoltaic glass is small, and part of the loss. The problem of uneven profit distribution in the whole soda ash chain is becoming more and more obvious. The profits of the industrial chain are mainly concentrated in the upstream raw materials. The end users, namely the downstream glass enterprises, have obvious resistance to high-priced soda ash. However, due to the differences in fundamentals, the right to speak is still weak. Only when the supply and demand fundamentals of upstream and downstream have changed substantially, can transmission of profit margin in the industrial chain be forced. Several key factors affecting the trend of soda ash in the
later period:
1. Macro aspect: the Fed's interest rate hike slowed down, the new crown optimization and liberalization and a number of favorable real estate policies, the implementation of RRR reduction and stable delivery policies, the continuous introduction of real estate policies around the country, the market confidence has been boosted, and the recent macro sentiment at home and abroad is generally positive. However, in January 2023, the consumer price index (CPI) of the United States rose by 0.5% annually and 6.4% year-on-year. Inflation pressure still exists, and interest rate hikes are still variable. The Two sessions will be held in March, and we will pay attention to whether there is an economic stimulus policy.
2. The first phase of Alashan Trona Project of yuanxing Energy is planned to be completed in June 2023 (5 million tons/year of soda ash and 400,000 tons/year of sodium bicarbonate). Pay attention to the actual production time. In the future, there will be 7.8 million tons of natural soda ash production, which is the biggest factor to change the current pattern of soda ash supply. If it can be put into production on schedule, it will be able to quickly solve the current situation of shortage of supply and demand of soda ash, squeeze the profit of soda ash and realize the price drop; if it can not be put into production on schedule, the supply and demand situation of soda ash will be more severe, the shortage of supply and demand may lead to irrational speculation of soda ash, and then it will also provide opportunities for the far month hedging of soda ash plants. With the arrival of the summer maintenance period, the impact of the increase in trona production capacity may further lag behind, and the change of supply and demand pattern is more likely to be delayed in the fourth quarter of 2023.
3. Pay attention to the cold repair of float glass in the later period, and the continuous loss will continue. Whether the unplanned cold repair of glass will be increased in 2023; the new ignition of photovoltaic glass. Change of daily melting volume of float glass and photovoltaic glass. In particular, we should pay attention to when the turning point of soda ash inventory will appear.
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