Since July, the trend of goods has become more differentiated, and the epidemic has suppressed the upward momentum of many varieties, with only soda ash showing slow growth.

There are several hurdles facing soda ash:

1. Producer inventories are very low, but glass factories have high implicit inventories;

2. Solar energy production capacity is expanding, but not immediately;

3. New contracts have fully met expectations, overspending.

In early August, spot prices increased by about 200 yuan. Currently, the lowest spot delivery price is 2350 yuan/ton (based on Jinshan insured delivery), and some high-priced areas are 2400-2500 yuan/ton. Downstream buyers still have a fear of high prices and cautious trading, alkali plants have sufficient orders, and goods transportation is smooth.

As of Thursday, there were no changes in domestic float glass production lines, with a total of 306 lines, 265 lines in production, and a daily melting capacity of 175,325 tons, the same as last week.

The average profit of the float glass industry is 1425.89 yuan/ton, a slight increase of 12.86 yuan/ton compared to last month, and the comprehensive industry profit increased by 0.91% week-on-week.

Glass is the direct downstream of soda ash, and good demand for glass directly drives soda ash. However, glass factories have accumulated a large amount of soda ash inventory, leading to a temporary supply and demand contradiction.

This week, the weighted average operating rate of soda ash manufacturers was 77.4%, a slight decrease from last week; profits were high, and the profit of joint alkali manufacturers increased to around 1100-1200 yuan per ton.

This week, the inventory of soda ash manufacturers was around 340,000-350,000 tons, a decrease of 4.2% month-on-month and a decrease of 68.7% year-on-year, marking the thirteenth consecutive week of inventory decline.

This week, the overall operating rate of soda ash was 77.14%, compared to 77.04% last week, an increase of 0.1% month-on-month. The joint production operating rate was 74.57%, a decrease of 3.73% month-on-month. The operating rate of ammonia soda was 79.15%, an increase of 4.27% month-on-month.

This week, the output of soda ash was 547,300 tons, an increase of 0.11%. The output of light soda ash was 248,000 tons, an increase of 7,000 tons month-on-month. The output of heavy soda ash was 299,300 tons, a decrease of 6,300 tons month-on-month.

Heavy soda ash is mainly used in glass production, with one ton of glass requiring 0.2 tons of heavy soda ash. Light soda ash is mainly used in the production of some daily chemical products. The soda ash in futures is heavy soda ash. Why should we pay attention to both? Because light soda ash is upstream of heavy soda ash, if the price of heavy soda ash rises, light soda ash producers will switch to producing heavy soda ash due to the lure of profits, which will increase the supply of heavy soda ash and pave the way for the price increase of light soda ash.

Currently, it can be seen that due to the stable demand for daily chemicals, the output of light soda ash fluctuates regularly, but due to the good demand for glass, the output of heavy soda ash remains high, which also verifies the supply and demand contradiction of heavy soda ash.

July Glass Soda Ash Research Views:

1. In the past, the inventory time of soda ash in glass factories was one month, but recently it has been 2 to 3 months. On the one hand, this is to prevent rapid price increases, and on the other hand, it is also necessary for safe and smooth production. Most manufacturers are optimistic about the long-term price of soda ash;

2. The building-integrated photovoltaic industry is currently only a pilot project. Once the demand for soda ash increases, the attitude of manufacturers storing more soda ash can also explain this point. Compared with glass, they are more optimistic about the long-term demand for soda ash;

3. It is unlikely that there will be a shortage of soda ash in the short term. A delivery warehouse has a large amount of soda ash, corresponding to the 2109 contract, and the volume is gradually increasing as the delivery date approaches, with sufficient supply;

4. In summary: The overall supply of soda ash remains stable at a high level, and the demand side is mainly based on two aspects: firstly, the real estate industry, which may have anticipated concentrated glass demand, and secondly, under the background of "dual carbon", the development potential of photovoltaic and other clean energy industries is huge. Once the building-integrated photovoltaic industry is widely promoted, the demand for soda ash will be very large, and it is expected that the demand will be good, and soda ash may continue to be optimistic in the long term.