Soda Ash Prices Gain Momentum in US and Asia Amidst Supplies Cut, European Market Remains Modest

The Soda Ash prices gained a marginal upward momentum across the US and Asian markets, primarily governed by the low inventories and slow increase in the downstream offtakes from the glass industry. The major global manufacturers and suppliers of Soda Ash have adjusted their operations based on profitability in July 2023. However, European Soda Ash prices have remained modest with sluggish demand, economic slowdown, and sufficient inventories to fulfill current inquiries in the market.

In China, a slight month-on-month decline in the overall price trend of Soda Ash was observed in July 2023, despite the decrease in supply due to the low downstream demand from the glass manufacturing industry. Furthermore, the Soda Ash is being purchased on an as-needed basis at the start of this month, and the purchasing enthusiasm in this regard has been moderate, indicating a balanced market sentiment. Moreover, the scheduled maintenance shutdown at Shandong Haihua Group with a total production capacity of 1.2 Million mt/yr from 20 June 2023 to mid-July 2023 at Weifang Shandong (China) and reduction in the production rates constrained the supplies for Soda Ash and impacted the prices in August 2023. The market participants opted to sustain their profit margins amidst improving downstream demand in the country, and tight supplies supported the current price trend for Soda Ash in China.

Similarly, the stability in the Soda Ash prices in the U.S. market has resulted from supply shortages in the second week of August 2023. As per the ChemAnalyst insights, the Soda Ash producers in the United States are predicting a turnaround in the global market in the face of current weak demand fundamentals and expected seasonal rise in the demand in the future. Soda Ash, used in various industries, including glass manufacturing, textiles, and chemicals, has experienced a decline in prices since the start of 2023. The weakened demand in various sectors prompted producers worldwide to reevaluate their output levels.

Nevertheless, the Soda Ash prices in the German market were low during July 2023 due to a pessimistic demand from the glass manufacturing sector, coupled with surplus stock levels. Moreover, the Central Bank of Europe raised interest rates to ease inflation in the regional market. The domestic buyers showcased a wait-and-see attitude, and producers opted to run down piled-up inventories at lower margins in Germany. The economic and geopolitical uncertainties and tightness in the financial conditions hindered the demand in July 2023. As per the data from Eurostat, the economic sentiment index dropped by approx 1% in July 2023 and again maintained southward momentum. From the supply perspective, the prices of Soda Ash have resulted from the consistent supplies and high level of stocks in July in the German market. Chemical producer, BASF, was set to re-route its logistics to trains and trucks at the termination of this month due to the disruptions caused by the heavy rains and rise in the Rhine River levels in July.

As per the 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 production run rates. The increase in the U.S Soda Ash prices is expected to be governed by a supply decrement from turnarounds and operational rate disruptions rather than demand.