Soda Ash Prices Surge in Asian Market Amidst Strong Downstream Support and Tight Supply

As November 2023 concluded, Soda Ash prices witnessed a rise in the APAC region, driven by optimistic expectations of increased demand in the glass industry in December 2023. Simultaneously, the Soda Ash market faced upward cost pressure due to elevated Liquedified natural gas costs and constrained production rates.

The constrained supply side primarily imposes the recent surge in Soda Ash prices in Asian countries and China. At the start of Q4, certain Soda Ash companies in Qinghai initiated production cutbacks due to environmental protection measures and production constraints. This reduction in industrial supply has led to concerns within the market regarding the availability of the inventories. Most of the Soda Ash manufacturers in central and northwest China have implemented order restrictions. As per the latest analysis, there is a potential expectation for further short-term increases in Soda Ash prices towards the end of this year.

The Soda Ash pricing trajectory in the South Korean market is poised for resilience in December 2023 due to the rebounding downstream demand from the glass segment and mainly due to constrained supplies from China. This shift in Soda Ash pricing has resulted from elevated prices in China amidst a rise in production costs and significantly reduced operational rates. Concurrently, the Soda Ash sector's downstream glass industry in South Korea is experiencing a consistent recovery, influenced by constrained stock availability and a rebound in new orders following the ease in inflation and improved consumer confidence.

Similarly, the Indonesian Soda Ash price trend has also gained positive momentum due to the muted inflow of stocks to fulfill current inquiries in the domestic market. The downstream glass and cleaning industry consumption gained momentum, and merchants increased prices in line with slowed supplies from China and the USA. Moreover, as per Indonesia's statistics department, inflation was recorded at 0.38 in November 2023, while economic growth stood at 4.94%. On the supply side, Soda Ash sellers are hesitant to reduce prices for near-term shipments, indicating that spot prices for Soda Ash will likely remain elevated. On the regional demand side, the activation of photovoltaic glass production is anticipated in December 2023, contributing to a steady and positive consumption of heavy alkalis, including Soda Ash.

As per ChemAnalyst, Soda Ash prices will gain a positive downstream demand outlook in the Asian market at the end of 2023. The regional Soda Ash prices are likely to be influenced by the low-supplied market for the short term amidst reduced production rates and high input cost pressure.