Soda Ash Market Showed Mixed Sentiments Across the Indian Market, Prices are Likely to Rebound in December 2022
RS Jalan, the managing director of GHCL Limited stated that the pricing of soda ash will probably rebound in December 2022, as the soda ash market showed mixed sentiments across the Indian market. Jalan discussed about the company's performance in the second quarter of the fiscal year 2022–2023, the market demand scenario for soda ash, and the weakness in the textile industry. He also mentioned that the market for soda ash is being quite constrained in terms of supply.
The demand has increased over the past couple of years despite no additional additions to manufacturing. Soda ash supply and demand are out of balance as a result of this. No additional capacity is anticipated to enter the market for the foreseeable future, with the exception of modest de-bottlenecking, until 2026 or 2027.
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Regarding the upward trend in soda ash pricing, the soda ash price volatility in comparison to other commodities has always been low because supply is always followed by demand. Because of the change in green energy, volume is also anticipated to travel north.
Additionally, soda ash is a crucial component of solar panels, so its volume is anticipated to increase. It was also mentioned how China's soda ash market dynamics are changing. China's building industry is experiencing difficulties, which could cause a short-term hiccup in worldwide prices. China is also increasingly pulling out of the global soda ash market and will instead concentrate on meeting domestic demand.
In North America, the market for soda ash saw an upward trend from September's end. Because domestic offers from the downstream automobile glass production industry increased, soda ash prices in the USA dramatically increased in September.
In the meantime, rising energy costs brought on by high demand and the impending winter season have pushed up input costs for the manufacturing of commodities this Quarter. Additionally, the announcement of a shutdown of the main chemical plant in Texas that produces Chlor alkali, Olin, at the end of this year led to bullish buying sentiments for soda ash in the local market.
For the third quarter of 2022, Soda Ash's pricing trend in the European market was consistent. At the end of Quarter 3 of 2022, Germany had output pressure on the prices of soda ash due to low downstream demand and high input costs. The War's high rate of inflation and rising energy costs caused the price of soda ash in the European region to go northward.
Moreover, a decrease in the Russian natural gas supply and a drop in Rhine River levels during the hot season increased market uncertainty for the commodity in this quarter. Meanwhile, cost pressure on the pricing of soda ash resulted from the euro's decline versus the dollar.
In Q3 2022, the market for soda ash showed a mostly consistent trend. Due to the disruptions in the supply chain between China and South Korea, the price trend of soda ash in the South Korean market demonstrated stability. The Chinese market's production activities have declined, which has had an impact resulting in the scarcity of inventory.
The pricing dynamics of soda ash in Asia were definitely impacted by the lack of inventory availability. Meanwhile, the sharp increase in energy prices and the high rate of inflation is seen to be contributing causes to the jump in the commodity's pricing dynamics. In the meantime, excessive inflation drove the South Korean and Chinese currencies to depreciate against the US dollar, which also increased the price of soda ash.
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As per Procurement Resource, mixed sentiments were visible in the Soda Ash Market. Prices in the Indian Market will probably increase in December 2022.