In 2006, the soda ash market started to boom from the beginning of the year, prices started to fall, and the second and fourth quarters have been operating at relatively high prices. The price of light soda ash from the end of 2006 to early 2007 was about 1,550 yuan (t price, the same below). The price of heavy soda ash is about 1680 yuan. As China's infrastructure investment accelerates, the domestic demand for soda ash will remain strong in the future, and prices for refined oil, coal, and electricity will remain high, which will play a supporting role for soda ash prices. However, due to the excessive growth of production capacity, there will be an oversupply situation in the short term. In 2007, the opportunities and challenges of China's soda ash industry will coexist.
In the past two years, due to the soaring soda market demand, major soda ash producers have expanded and newly built production facilities, such as Tangshan Sanyou, Nanhua Company, Qinghai Alkali Industry, Kunshan Jingang, and Jiangsu Huachang. According to the current calculation of major domestic new build and expansion soda ash plants, the new production capacity will be around 1.8 million tons in 2007, and the output will increase by approximately 1.5 million tons. It is estimated that the domestic soda ash production capacity will reach approximately 19.5 million tons in 2007, and the output will reach 17.3 million to 17.4 million tons, and the consumption will reach 15.7 million tons.
In 2007, with the continuous increase in domestic soda ash production, market competition will become more intense, and companies will continue to increase their export intensity. As the domestic soda ash enterprises gradually move toward large-scale and centralized development, there will be active cooperation in export. The Chinese soda ash economic consortium is actively negotiating the establishment of the Chinese soda ash complex import and export company; meanwhile, due to the appreciation of the renminbi and the soda ash in China. In all regions of the world except the Southeast Asian region, the competitiveness is not strong, the country will introduce a series of policies to promote the balance of international payments, adjust the growth mode of foreign trade and reduce the growth of trade surplus. It is expected that the export volume of soda ash in China will increase slightly from 2006 to about 1.9 million tons.
The import tariffs for soda ash this year will be canceled. It is also predicted that international oil prices will decline slightly and the import transportation costs will decline, so the import volume will increase. However, in the past few years, only when domestic soda ash prices are high, some domestic users will consider importing soda ash, and tariffs and transportation costs will have no significant impact on the price of imported soda ash. Therefore, the domestic soda ash imports in 2007 are expected to be around 17%. 10,000 to 180,000 tons, an increase of about 10% from 2006.
In 2007, China’s consumer goods market continued to be active and vigorous, which will stimulate domestic soda ash consumption. The consumption of flat glass accounts for more than 30% of the total consumption. In recent years, the domestic production line has been building rapidly. Although the country’s implementation of macro-control has prompted the suppression of the rapid growth in demand for glass, due to the continuous decline in domestic coal tar and heavy oil prices, supply and demand tensions such as coal and heavy oil will be eased, and the cost of glass production will continue to fall. In addition, in recent years, many newly-built domestic and high-tonnage float glass production lines have been newly built in China. In 2007, many production lines will be put into operation one after another. The demand for soda ash will continue to grow rapidly.
Alumina production will continue to maintain rapid growth in 2006. In 2006, many newly-built plants reached the standard production in 2007. However, since the new production is basically produced by the Bayer process and no soda ash is used, the consumption of soda ash over alumina for a relatively long time in the future It will stabilize between 300,000 and 350,000 tons. Other industries such as textiles and ordinary glass will also maintain stable growth.
Although the domestic soda ash market demand remains strong in 2007, due to the fact that the capacity expansion rate exceeds the demand of the downstream market, short-term oversupply may occur.
At the end of 2006, soda ash prices showed an upward trend. It is understood that the major soda ash producers currently have almost no inventory products. Therefore, it is expected that the price of domestic soda ash in the first quarter of 2007 will remain at a relatively high level due to this inertia. The domestic authoritative agencies predict that the domestic crude oil and coal supply shortages will be eased in 2007 and prices will decline. It is expected that the domestic soda ash prices will decline in the second quarter. Domestic soda ash enterprises are generally inspected from June to July, when prices will increase, but the prices will be lower than the prices at the beginning of 2007. In August, the expansion of domestic soda ash and the gradual release of some of its new capacity have caused the situation of domestic oversupply to be severe. Therefore, in September, the price of soda ash may decline considerably. In the fourth quarter, domestic soda ash prices may further decline. The profit space of the equipment is compressed, and it is expected that many soda ash companies will experience a loss situation. It is worth paying high attention to domestic soda ash and downstream industries.
In the past two years, due to the soaring soda market demand, major soda ash producers have expanded and newly built production facilities, such as Tangshan Sanyou, Nanhua Company, Qinghai Alkali Industry, Kunshan Jingang, and Jiangsu Huachang. According to the current calculation of major domestic new build and expansion soda ash plants, the new production capacity will be around 1.8 million tons in 2007, and the output will increase by approximately 1.5 million tons. It is estimated that the domestic soda ash production capacity will reach approximately 19.5 million tons in 2007, and the output will reach 17.3 million to 17.4 million tons, and the consumption will reach 15.7 million tons.
In 2007, with the continuous increase in domestic soda ash production, market competition will become more intense, and companies will continue to increase their export intensity. As the domestic soda ash enterprises gradually move toward large-scale and centralized development, there will be active cooperation in export. The Chinese soda ash economic consortium is actively negotiating the establishment of the Chinese soda ash complex import and export company; meanwhile, due to the appreciation of the renminbi and the soda ash in China. In all regions of the world except the Southeast Asian region, the competitiveness is not strong, the country will introduce a series of policies to promote the balance of international payments, adjust the growth mode of foreign trade and reduce the growth of trade surplus. It is expected that the export volume of soda ash in China will increase slightly from 2006 to about 1.9 million tons.
The import tariffs for soda ash this year will be canceled. It is also predicted that international oil prices will decline slightly and the import transportation costs will decline, so the import volume will increase. However, in the past few years, only when domestic soda ash prices are high, some domestic users will consider importing soda ash, and tariffs and transportation costs will have no significant impact on the price of imported soda ash. Therefore, the domestic soda ash imports in 2007 are expected to be around 17%. 10,000 to 180,000 tons, an increase of about 10% from 2006.
In 2007, China’s consumer goods market continued to be active and vigorous, which will stimulate domestic soda ash consumption. The consumption of flat glass accounts for more than 30% of the total consumption. In recent years, the domestic production line has been building rapidly. Although the country’s implementation of macro-control has prompted the suppression of the rapid growth in demand for glass, due to the continuous decline in domestic coal tar and heavy oil prices, supply and demand tensions such as coal and heavy oil will be eased, and the cost of glass production will continue to fall. In addition, in recent years, many newly-built domestic and high-tonnage float glass production lines have been newly built in China. In 2007, many production lines will be put into operation one after another. The demand for soda ash will continue to grow rapidly.
Alumina production will continue to maintain rapid growth in 2006. In 2006, many newly-built plants reached the standard production in 2007. However, since the new production is basically produced by the Bayer process and no soda ash is used, the consumption of soda ash over alumina for a relatively long time in the future It will stabilize between 300,000 and 350,000 tons. Other industries such as textiles and ordinary glass will also maintain stable growth.
Although the domestic soda ash market demand remains strong in 2007, due to the fact that the capacity expansion rate exceeds the demand of the downstream market, short-term oversupply may occur.
At the end of 2006, soda ash prices showed an upward trend. It is understood that the major soda ash producers currently have almost no inventory products. Therefore, it is expected that the price of domestic soda ash in the first quarter of 2007 will remain at a relatively high level due to this inertia. The domestic authoritative agencies predict that the domestic crude oil and coal supply shortages will be eased in 2007 and prices will decline. It is expected that the domestic soda ash prices will decline in the second quarter. Domestic soda ash enterprises are generally inspected from June to July, when prices will increase, but the prices will be lower than the prices at the beginning of 2007. In August, the expansion of domestic soda ash and the gradual release of some of its new capacity have caused the situation of domestic oversupply to be severe. Therefore, in September, the price of soda ash may decline considerably. In the fourth quarter, domestic soda ash prices may further decline. The profit space of the equipment is compressed, and it is expected that many soda ash companies will experience a loss situation. It is worth paying high attention to domestic soda ash and downstream industries.
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