Global Short Supplies Opportune the US Soda Ash Manufacturers to Raise Their Offers

The Soda Ash price took an uptrend towards the end of August 2023 across the US market, primarily driven by supply disruptions in the global market. Meanwhile, the manufacturers of the USA tried to take center stage in the international market amidst muted supplies from other Asian countries, including China and parallelly increased the prices of Soda Ash to improve their margins in the recent week of the month.

In a recent analysis, an increase in the overall price of Soda Ash was observed in Asia this week, as the manufacturers in the Chinese market had to scale back their supplies due to maintenance turnarounds, which reduced their output, prompting speculation about the potential impact on the market's dynamics of Soda Ash in the coming weeks. In the midst of the decrease in supply, the regional demand for Soda Ash has shown an increasing trend at the termination of the month, indicating an imbalanced market situation. On the other hand, Indian Soda Ash manufacturers, including Tata Chemicals, hiked their quotations by 13% due to regional short supplies, which has been pressuring traders to import expensive cargo from overseas markets, including China and the USA. In China, Jiangxi Jinghao Salt Chemical announced a maintenance turnaround from 20 August 2023 at Zhangshu City, Jiangxi, with a total production capacity of 360,000 mt/year. The current landscape suggests that the Soda Ash price trend might experience consolidation in the short term, with its direction being closely intertwined with the patterns of downstream market demand.

The Soda Ash prices surged in the US market, resulting from the global supply shortages in the mid-week of August 2023. As per the ChemAnalyst insights, the supply drop has been attributed to the low level of inventories, prompting producers worldwide to reevaluate their output levels. Moreover, the market participants of the USA tried to sustain their margins across the international market to counteract the prevailing demand weakness and, conclusively, elevated the Soda Ash export prices in the overseas market.

As per ChemAnalsyt, the Soda Ash price trend is anticipated to increase for a short time frame across the USA and Asia, majorly due to the slowed-down supplies amidst production cuts in China. The recent increase in the US export prices of Soda Ash stemmed more from a supply decrement from turnarounds and operational rate disruptions rather than demand across the global market. Hence, once the supplies normalize, Soda Ash prices could gain any other change in the prices in the H2 of the year.