Shouchuang Futures: Supply and demand remain loose, soda ash futures continue to decline

On the supply side, Henan Junhua is expected to resume operations; Inner Mongolia Boryuan Yingen Chemical’s output has not yet recovered. Soda ash capacity utilization rose slightly to 82.80%. Last week, soda ash manufacturers’ inventories were 1.8519 million tons, down 1.9k tons month over month, with a decline of 0.1%. Enterprises maintained production and sales, and carried out orders. The number of soda ash shipments-on-the-way orders fell for three days; it is currently maintained at around 10 days. This week, Inner Mongolia Boryuan Yingen may increase throughput, and Henan Junhua has a recovery expectation, so supply is set to increase.

On the demand side, downstream demand is generally steady, with purchases made as needed; expectations are clouded more, and sentiment has worsened. Downstream consumption volume is stable but slightly lower; finished-product pressure remains high. In some industries, production lines have been shut down or reduced. The float glass daily melt volume was 144.3k tons, down 900 tons month over month. The photovoltaic daily melt volume was 87.3k tons, down 2,040 tons month over month. This week, three float-glass lines are expected to undergo cold repairs, with total capacity of 1.9k tons; expected weekly output is 1.0092 million tons. One photovoltaic line will release water on Line 800; the estimated operating capacity is 608.8k tons.

In short, as soda ash units resume, supply is likely to increase. The downstream glass industry is still in a clearing phase; daily melt volumes may continue to decline, and soda ash will maintain an oversupply pattern. It is expected that in the near term, soda ash futures prices will remain weak; watch changes in energy prices, equipment maintenance/repairs, and the downstream restocking pace. (CITIC Futures)