Cao Lu of Orient Securities Derivatives Research Institute: Optimistic about the boom cycle of the soda ash industry in 2021-2022

Cao Lu, a researcher at the Orient Securities Derivatives Research Institute, told china securities news reporters on October 20 that in the context of global carbon neutrality, the demand side of soda ash will benefit from the development of photovoltaic glass and lithium carbonate for a long time. Under the improvement of supply and demand, the soda ash industry in 2021-2022 will be in a state of destocking as a whole, and it is optimistic about the boom cycle of the soda ash industry in 2021-2022.

Cao Lu introduced that in 2019, Inner Mongolia Yuanxing Energy planned an 8 million tons of natural alkali project, which is expected to be completed in 3-5 years. After the end of 2022, the first phase of the project may be put into production, and once the natural alkali production capacity is put into operation in large quantities, it is expected to have a greater impact on the domestic soda ash supply and demand pattern. After 2022, due to the uncertainty of natural alkali production capacity, the current supply and demand pattern of soda ash is difficult to judge.

He introduced that like ordinary glass, one of the main raw materials of photovoltaic glass is also soda ash, and a single ton of glass consumes about 0.2 tons of soda ash. From a long-term perspective, the incremental impact of photovoltaic glass on the demand side of soda ash is more significant, after 2025, as the demand for photovoltaic glass enters a more rapid release stage, the consumption of soda ash will also be significantly improved. After 2025, the annual demand for soda ash in domestic photovoltaic glass is expected to exceed 5 million tons, and even more than 8 million tons after 2028.

In addition, China is the world's largest supplier of lithium carbonate, lithium carbonate production accounts for more than 60% of the world's total. According to the calculation of 60%, the amount of soda ash consumed by lithium carbonate in China will reach 1.2545 million tons in 2025, an increase of about 890,000 tons over 2020. In 2020, the apparent demand for domestic soda ash is about 26.8 million tons, of which the demand for lithium carbonate contributes only about 1.4%. In the context of carbon neutrality, the impact of lithium carbonate industry on the demand side of soda ash is imperceptible, in the medium and long term, the increase in soda ash consumed by lithium carbonate is large, and it will gradually form a more significant impact.