Soda ash industry: limited production price looks very beautiful.
Date:2013-05-01   View:3133

Business agency, April 27th - side is the automotive, real estate industry downturn, one side is the United States of America soda impact the domestic market, enveloped the soda ash industry is a step by step increase chill.

As the production of bulk chemicals industry, good day high profits in the soda ash industry seems to have gone for ever, development has entered a bottleneck period. In 2012, China's economy is on a downward trend, therefore, automobile, real estate and other major industry demand for soda ash industry downstream also obviously slowed down.

Business club soda ash industry analyst Song Ping told the 'China Sankei news' reporter said, soda ash light ex-factory price in 2011 from 2000 yuan / ton dropped to 1200-1350 yuan / ton now. Jiangsu in the vicinity of the distributor price in the 1180-1200 yuan / tons, but the actual transaction price quotation is much lower than. Even some manufacturers to Yunnan area of the ex-factory price is lower, 'Fei Liu 直下'.

Relevant data shows, China's soda ash industry at a loss for a long time, the soda enterprises operating rate of about maintaining into about 7, low load production of most enterprises. In 2012, the main production enterprises, there are 12 ammonia soda enterprise losses reached 83.3%, loss of 2000000000 yuan, 31 joint soda enterprise losses reached 54.8%, a loss of about 1200000000 yuan. In the first quarter of this year, losses continued.

'China Sankei news' reporter in the interview that, throughout the soda ash industry, in the face of low prices, the losses of the enterprise, inventory is high, the soda ash industry development is also difficult.

So, what is the reason for the soda ash industry outlook? Song Ping tells a reporter, the main problem of soda ash industry is facing in the serious oversupply of production capacity situation, production capacity and output growth is still in the expansion, the downstream products decreased significantly, resulting in intense contradiction of supply and demand.

Data shows, 2012 China's soda ash production capacity up to 28000000 tons, annual production capacity of 300000 tons of large-scale enterprises have more than 100, in 2012 24039000 tons of soda ash production country, this year will be completed and put into production 3200000 tons production capacity, much higher than the actual demand.

In 2012, in the face of falling market, not only the enterprise ammonia alkali loss badly, even the soda enterprises could not escape. In order to cope with the adverse situation, some enterprises to take production or limited production of the last straw, in order to reduce the loss 'price'.

Shandong Haihua (3.63, -0.20, -5.22%) Limited by Share Ltd general manager Fu Xiquan said in public, the company has started rate from 74% in 2012 down to 70% now, the current monthly production of less than 175000 tons.

According to the China Soda Industry Association responsible person introduced, aiming at the soda Association Limited production proposal, 2012, Shandong Haihua Group, Tangshan Sanyou chemical (4.37,0.01,0.23%) Limited by Share Ltd, Lianyungang (3.19, -0.03, -0.93%) factory more than a dozen large soda enterprises responsible person expressed support, and plans to begin production from 20% last year.

Some of the media reports, more than a dozen large soda enterprises have reached a preliminary agreement, according to production capacity of 20%, the yield decreased by about 10%, and strive to actual production control in 2011 22360000 tons.

Worth pondering that, limiting the production of large soda enterprises, but the soda ash production has not declined, but in the last 10-11 months increased the monthly average of 2010000 tons, the market appeared production than sales situation, resulting in soda ash prices continued to decline, industry losses further intensified.

So, in order to guide price of soda ash production method of the smooth operation of the questionable whether? The limiting effect of big enterprise is not obvious fact that soda ash industry realized that, limiting thoughts may be too 'simple', in the downstream market demand is uncertain, in the premise of overcapacity, only by limiting the production of more than a dozen large enterprises to pull the soda ash prices may be 'indulge in the wildest fantasy'. On the one hand, the 'roller coaster' soda ash prices did not bring the sharp price increases; on the other hand, limited production also can't control the productivity rises.

According to media reports, Sinopec deputy director of Lianyungang Soda Li Qingju said, we in the output of 2012 was 1027000 tons, serious losses. In 2013, we plan to production is 1000000 tons, group company asked us to limit losses to 120000000 yuan this year, but in the first quarter of this year the situation, it is difficult to achieve this goal.

In the near future the soda ash industry membership meeting, soda ash enterprises responsible person said to the media said, countries want soda ash industry limited production, enterprises have the plan, but the local government hope that they can continue to increase investment in soda ash project.

In this regard, to accept the 'China Sankei Shimbun' reporter interviewed business information network chemical industry researcher Yang Min analysis, limited production price from last year put forward, but all without success. On the premise of local government performance is supreme and enterprises to pursue interests, blind investment in the short term is difficult to eliminate chaos, limited production price measure uncertainty.

Song Ping expresses, overcapacity will inevitably lead to lower prices, if the control capacity, then, prices will rise. Limited results are still can not solve the loss pattern, at present, the soda enterprises continue to further limited production price, prices rose slightly, it is just a matter of expediency industry, finally decided to market the key or the relationship between supply and demand, limited production does not fundamentally change the soda market overcapacity situation.