Summary of views: With the bidding price of China National Building Materials Henan Heavy Alkali determined to be 2230-2280 yuan / ton, it opened the prelude to the heavy alkali replenishment of the glass factory.
This week, soda ash production increased by 23,000 tons month-on-month, of which heavy alkali production increased by 10,000 tons month-on-month, light alkali increased by 15,000 tons, mainly due to the resumption of production at Red Sifang and Tianjin Alkali Plants. In mid-to-late January, it may still be more production cuts, Chongqing Heyou 400,000 tons of production capacity maintenance for 10 days to 19th, Shandong Haihua 3 million tons of production capacity operating rate has dropped to 70%, and may continue to decline later, in addition, Henan, which stopped production in October 21, won 400,000 tons of production capacity, and may resume production in the near future. Probably this week's production of 551,400 tons is the January high. As the price of light alkali continues to weaken and is close to the cost line of alkali plants, the proportion of heavy alkali in soda ash production has reached 53.37%, a high point in half a year.
This week, the growth rate of soda ash stocks slowed down significantly, increasing by 17,000 tons to 1,835,100 tons month-on-month, of which heavy alkali increased by 12,000 tons and light alkali increased by 0.5 million tons. The number of soda ash inventory days in glass factories remained low at 30.5 days. As the dust settles on the bidding of CHINA National Building Materials, other glass factories will gradually begin to replenish the warehouse. Generally February is the traditional off-season, the demand is weak, generally still tired, the real destocking may occur in February to March.
Strategy: Because the price of light alkali is 2000 yuan / ton, it is close to the cost line, the 05 contract price is 2450 yuan / ton, there is a good margin of safety, you can consider buying light alkali empty disk 05 contract.
Risk Warning:1. 2. The spot price of thermal coal has been significantly reduced; Real estate recovery fell short of expectations and glass demand continued to weaken.
Alkali plant overhaul
Soda ash overhaul statistics
This week's high production is mainly due to the resumption of production at the Red Sifang and Tianjin alkali plants.
Chongqing Heyou 400,000 tons of production capacity maintenance 10 days to 19th, Shandong Haihua 3 million tons of production capacity operating rate has dropped to 70%, and may continue to decline later.
In addition, Henan, which stopped production in October 2011, has a production capacity of 400,000 tons and may resume production in the near future.
In our view, overall, production may be cut more in mid-to-late January.
Source: Longzhong Chemical, Bureau of Statistics, Tianfeng Futures Research Institute
It is likely that production will continue to decline later
This week, soda ash production increased by 23,000 tons to 551,400 tons, of which heavy alkali production increased by 10,000 tons to 294,300 tons, and light alkali increased by 15,000 tons to 257,100 tons.
As production capacity and output are close to bottlenecks, alkali plants have low profits and high inventories, and production may gradually decline in mid-to-late January.
Source: Longzhong Chemical, Tianfeng Futures Research Institute
inventory
Soda ash upstream and downstream inventory ice and fire double day
This week, the growth rate of soda ash stocks slowed down significantly, increasing by 17,000 tons to 1,835,100 tons month-on-month, of which heavy alkali increased by 12,000 tons and light alkali increased by 0.5 million tons.
Futures merchants trade inventory is also low, with the disk surface continues to rise in price, and the factory quotation has not changed, the disk surface rise is larger, may be traders are about to start replenishment.
The number of soda ash inventory days in glass factories remained low at 30.5 days. As the dust settles on the bidding of CHINA National Building Materials, other glass factories will gradually begin to replenish the warehouse.
Source: Wind, Longzhong Chemical, Zheng Shang, Tianfeng Futures Research Institute
This week the pool has decreased
demand
Soda ash sales rate returned to the high point level
The sales rate of soda ash is 97%, the high point of the past 3 months, and the inventory of the alkali plant will continue to decline.
Source: Bureau of Statistics, Longzhong Chemical, Tianfeng Futures Research Institute
Import and export
Overall, net exports have declined this year, with a slight increase in exports recently
Since 2016, soda ash exports have declined year by year. From exports of 2 million tons in 2016, it fell to 500,000 tons.
Exports have improved recently, with 63,000 tonnes exported in November, the highest level since the second half of the year.
Soda ash balance sheet
In February-March, soda ash begins to go to the library
According to the currently announced soda ash maintenance plan, the peak production in January was 2.4 million tons.
Generally February is the traditional off-season, the demand is weak, generally still tired, the real destocking may occur in February to March.
Source: Wind, Bureau of Statistics, Customs, Longzhong Chemical, Tianfeng Futures Research Institute
Soda ash profits
Alkali plant profits continue to decline
The profit of huazhong light alkali has dropped from 2000 yuan / ton in November 2021 to 359 yuan / ton now.
The cost of alkali plants still has room to fall for thermal coal, the current price of thermal coal is 900 yuan / ton, it is possible to fall to the level of 600 yuan / ton in 22 years, and the cost will fall by 150 yuan / ton.
Source: Wind, Tianfeng Futures Research Institute
The profit on the plate is 800 yuan / ton level
Spot costs do not fluctuate much, and the price of soda ash disk surface has been 7 consecutive yang.
Monthly difference in soda ash
The rising market is reversed
Soda ash plate prices continued to rise this week, while the September contract rose even more.
5-9 months difference -150 can be considered positive set.
Soda ash holdings are at a record high
Soda ash holdings are at a record high.
This article originated from the Tianfeng Futures Research Institute