Lacklustre in Asian Soda Ash Market, Prices to Remain Under Pressure

In the concluding month of the first quarter of 2024 i.e., March 2024, the Soda Ash market dynamics in Asia indicated a notable decrease in price volatility and faced a downturn due to ample supply and low downstream demand. Overall, the Soda Ash market lacks robust fundamental drivers, prompting attention toward the supply-side variables. In the short term, restricting significant new developments, the main Soda Ash contracts are likely to remain within the downward trend.

On the demand side, downstream stocks have been replenished, resulting in average new order transactions and a cautious stance from downstream markets. Furthermore, the influx of imported alkali at ports has contributed to supply dynamics, further dampening Soda Ash market sentiment in Asia. The downstream Glass market experiences a sharp decline in response to weakening production and sales, along with inventory accumulation during March 2024. Thus, the downstream demand decline for Soda Ash was attributed to several factors including subdued real estate data, a dip in glass production and sales, and the accumulation of inventory due to heightened production.

Chinese Spot prices reflect the market sentiment, while transactions in the regional market remained stable, the East and Central China markets saw price reductions over the weekend, accompanied by average sales. In an attempt to stimulate demand, some companies in the South China market have slashed their prices. Despite efforts to stabilize prices in certain areas, Soda Ash sales have once again faltered, with no significant improvement in real estate and related industries in March 2024. Short-term price fluctuations are expected to remain subdued, albeit with a potential for weakness. Meanwhile, Yuanxing's increased production capacity and anticipated rise in alkali production in Qinghai suggest that the Soda Ash supply will remain abundant.

Conclusively, the oversupply pattern in the Soda Ash market persisted in March 2024, with ample stock availability and waning downstream replenishment sentiment. This may prompt Soda plants to resume inventory accumulation, potentially leading to further market declines. Given these conditions, short selling on rallies remains a prudent strategy in the Soda Ash market.

As per the ChemAnalyst, the outlook for Soda Ash supply and demand remains pessimistic, with the possibility of prices declining further, potentially nearing the ammonia-alkali process cost line. As such, caution is justified regarding potential shifts in Soda Ash import and export patterns following price adjustments in Asia. The Soda Ash prices are expected to fluctuate based on the US market situation in the Asian market amidst tight supplies and supply chain-related delays in the coming weeks in the line port closure due to the Baltimore situation in the USA at the termination of March 2024.