2013 soda ash industry may not be able to break the loss situation

The economic crisis in 2012 made downstream manufacturers of soda ash reduce their orders significantly. This is not the main problem. Soda ash makers in this country still substantially increase output, and the complete disconnection between supply and demand leads to the continuous decline in the price of soda ash. Huge loss.

According to statistics, in 2012, the domestic soda ash production was 24.01 million tons, an increase of 7.4% year-on-year. Of the major production enterprises, 12 ammonia-alkali enterprises suffered a loss of 83.3%, and the loss amounted to 2 billion yuan. 31 losses of the soda ash industry reached 54.8%, and the loss amounted to nearly 1.2 billion yuan. In the first quarter of this year, the losses continued.

Shangpu Consulting chemical industry analysts believe that the soda ash industry that has been losing for a year may not be able to take a loss this year. At present, it seems that the entire industry has not yet bottomed out. In 2013, it will be a complete "hard landing."

This dilemma is completely paying for the impulsive act of blindly increasing production that had previously ignored the market trend. According to preliminary estimates, as of the beginning of April this year, the total inventory of domestic soda ash enterprises has reached more than 1 million tons. The shortfall between the supply volume and market demand led to a straight-line decline in the price of soda ash, and soda ash makers are still producing, because the suspension of production is unrealistic. However, despite the limited production, this part of the output will inevitably squeeze further after entering the market. The high inventory in the previous period makes it difficult for people to laugh or laugh. After experiencing the huge profits of the whole industry in 2011, the current industry conditions have caused all manufacturers to complain and the huge gap is unacceptable but helpless.

According to the “2013-2017 China Soda Market Survey Report” published by Champion Consulting, the 2013 soda ash industry is facing with many difficulties and the decline in economic benefits is currently inevitable. The huge amount of social ownership and slow growth of downstream demand are two major issues. In fact, in the early period of economic downturn in 2012, some people proposed to limit production of enterprises. However, due to the fiery market in 2011, investment began to blind up, ignoring the basic economic laws, and ultimately leading to the normal punishment of the current market. The current effective approach seems to be the only way to continue to limit production. In the case of serious losses, although reducing production seems to be a kind of “self-inflicted” behavior, in the long run it is actually possible to put a positive attitude on it. The crackdown in 2012 should have caused the entire industry to suffer from the “battle” that is contrary to the laws of the market. ". In short, in 2013, the soda ash industry was completely out of the current “muddy” difficulties.