The listing price of soda ash futures is slightly lower, and the spot price is close to the production cost of the factory, and the margin of safety for long-term trading is higher. However, in the context of oversupply and high inventory, there is limited space for rising, so investors can trade short-term, enter the market with light positions, and make long-term bargain.
On December 6, soda ash futures landed at Zhengshang exchange. Judging from the situation in recent trading days, the market is active in trading, with enthusiasm for capital participation, and the contract formulation is in line with the actual spot trading. On December 10, sa2005 and sa2009, the intraday trading limit directly rose, and on December 11, it continued to rise, but there was no significant change in the spot market. In the case of relatively weak fundamentals, the rise height is expected to be limited.
| Melamine |
The current situation of oversupply is hard to change
In 2019, the capacity of soda ash will be expanded for a long time again, while the operating rate will remain high, but the demand will not be synchronized, and the market supply will exceed the demand obviously. In 2014, the capacity of soda ash reached a record high of 31.35 million tons. From 2015 to 2016, the capacity was continuously de capacity. By 2017, due to the improvement of demand, the capacity was expanded again. It is expected that the capacity growth rate in 2019 will be as high as 8.44%. In the same period, the capacity growth rate of main downstream flat glass of soda ash was only 5.2%, significantly lower than that of soda ash.
From February to November 2019, the operating rate of soda ash industry was 87.06%, and only 81.56% in the same period of 2018, with a year-on-year growth of 5.5 percentage points. In December, the operation rate of soda ash industry will remain high, and local maintenance will not affect the overall operation. In addition, from January to October, the total export of soda ash reached 1.179 million tons, up 0.7% year on year, and the export was relatively stable. The production capacity has increased substantially, the operating rate has remained high, while the export and consumption are relatively stable, and the price of soda ash is under pressure.
De stocking time node may be advanced
The fourth quarter is the peak season of soda ash consumption. Generally, the factory will respond with high operating rate and high output. After the Spring Festival, when the price falls, the factory will start to repair and the inventory will decline. Data shows that as of December 5, soda ash inventory was 774100 tons, an increase of 30700 tons on a month on month basis, compared with 192200 tons in the same period last year, an increase of 5819000 tons on a year-on-year basis.
| EDTA 2Na |
At present, the soda ash inventory is still in the rising channel, and is far higher than the same period last year. In the context of high inventory and falling prices, glass enterprises delayed procurement, and traders carefully prepared goods, resulting in accelerated inventory accumulation. In the later stage, the soda market will enter the de stocking stage only when the maintenance of soda plants is increased and the winter storage and replenishment warehouse of glass enterprises is opened. However, in the fourth quarter of 2019, it is different from the previous years. The price of soda ash fell earlier, the time of factory overhaul may be earlier, and the time of soda ash de stocking will also be earlier.
Loss on production in high cost factories
With the decrease of spot price, the profit of soda ash plant shrinks, and some high cost plants even lose money. It is estimated that at present, the profits of ammonia alkali and combined alkali plants are within 100 yuan, which is at a low level since 2017. Generally, low profit lasts for a period of time, which will stimulate the factory to overhaul ahead of time or adjust the operating rate level to achieve the supply and demand rebalancing. Among them, the production of the 8000 T / D units in Shandong Haihua was limited since December 2 due to the impact of environmental protection, and the daily production was reduced by 1500 tons; the 900000 T / a units in Sichuan and hopang were overhauled since December 4; the units in Xindu, Hubei Province are scheduled to be overhauled in the past two days; the units in Shuanghuan, Hubei Province are scheduled to be overhauled at the end of the month. The increase of parking and maintenance devices is conducive to alleviating the imbalance between supply and demand in the soda ash market and stabilizing and rebounding the spot price.
Forecast for future market
Since October, the spot price of soda ash has continued to fall. At present, it is close to the bottom line of manufacturers, and there is little room for further price reduction. Considering winter storage demand and year-end transportation pressure, soda ash price is expected to stabilize and rebound. However, the overall oversupply of the market results in a weak upward drive. Based on the above judgment, it can be expected that the price of soda ash futures will continue to rebound in the short term, but time and space are limited, so investors can try to bargain long.
| EDTA |