SINGAPORE (ICIS)–China’s soda ash market
extended gains as producers stood firm on
higher offers in a bid to recover margins on
the back of production cost pressures.
But the availability of competitive deep-sea
cargoes amongst other factors, may continue to
weigh on sentiment.
Other than squeezed margins, supply constraints
amid a spate of
soda ash plant
turnarounds in China bolstered the
sentiment of suppliers as they targeted offers
at $175-185/tonne free on board (FOB) China for
the dense grade soda ash.
In contrast to China’s domestic demand which is
enjoying a boost from the downstream glass
sector amid a recovery in the housing market –
southeast Asia’s buying sentiment weakened due
to a resurgence in the coronavirus outbreak in
countries such as Vietnam.
Downstream buyers in Asia indicated that price
was less of an issue compared to the loss in
demand and uncertainties due to the coronavirus
outbreak resurgence.
Across Asia, the combination of a slowdown in
the downstream construction industries and the
availability of deep-sea cargoes at lower
prices kept buyers on the sidelines.
Underpinning the poor market conditions,
selling indications for Turkey origin bulk
cargoes surfaced at a steady-to-soft
$160-180/tonne cost and freight (CFR) NE/SE
Asia level, depending on the volume.
Selling indications in early July were at
$170-180/tonne CFR NE/SE Asia.
This contrasted with China origin offers at up
to $200/tonne on a CFR NE/SE Asia basis, which
elicited muted buyers’ response.
Some buyers opted for a wait-and-see stance for
an anticipated inventory build-up in China due
to poor export sales.
During the week ended 29 July, the spot prices
of dense grade soda ash rose $5/tonne at
$170-175/tonne FOB China, ICIS data showed.
Import prices of the same across Asia were
steady-to-firm during the same week at
$170-185/tonne CFR NE/SE Asia, reflecting a
$5/tonne gain in southeast Asia.
Soda ash is an essential ingredient in the
manufacture of detergents, soaps, cleaning
compounds, sodium based chemicals, float glass,
container and specialty glasses, silicates and
other industrial chemicals.
It is also widely used in textiles, paper,
metallurgical industries and desalination
plants.
Focus article by Helen Lee
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