Soda Ash prices in China tumbles in Lieu of the Bearish Demand Pattern, Mountings Inventories Extends Pressure

Soda Ash prices continued to tumble in China in lieu of the narrowed demand and supply gap in the country. China Soda Ash market continued to experience tailwinds influenced by heavy inventories of the product amidst the bearish demand pattern. Soda Ash prices since late-October have plummeted by nearly 25% as majority of buyers remained at bay absorbing the unprecedented rise in its prices in H1 2021.

In December, despite of the dull demand pattern, operating rates of Soda Ash plants in China were increased. High operating rates resulted in higher output which directly impacted its prices negatively throughout the month. Prices continued to fall owing to mounting inventory levels and consistent negotiations by traders on spot offers. In January, enquiries for Soda Ash reached a bare minimum owing to the reduced activities in the construction sector. In line with the limited purchasing, Soda Ash prices showcased an astonishing fall by nearly 7% in the first ten days of January in China.

Even though export enquiries for Soda Ash have remained prevalent, they have not been enough to overpower the extreme reduction in demand from construction sector in China. It has been heard that manufacturers are not in the mood to limit their production before the lunar holidays in the nation, hence the supply pressure is unlikely to ease in the whole of January.

As per ChemAnalyst, “As the supply of Soda Ash is anticipated to remain ample in China, its prices are unlikely to revive in the near term. Besides, the dept situation in the construction sector is also expected to drag the consumption of various commodities including Soda Ash, making its prices to plummet further. Besides, traders are also expected to continue allowing consistent negotiations to initiate the depletion of existing inventories.”