On the 26th, it was learned from the authoritative department that the “12th Five-Year Development Plan for the Soda Ash Industry†has surfaced.
In view of the trend of further excess production capacity, China will control the total amount of soda ash products, maintain the basic balance between supply and demand for soda ash, and control the production capacity of soda ash by 30 million tons by 2015. According to the planning ideas, in the future, China will encourage large-scale soda ash companies that play a major role in industrial upgrading. They will become bigger and stronger through technological transformation projects, reorganizations, etc., and will strictly control new construction projects.
Soda Ash Market Oversupply
From 2005 to 2008, the output of soda ash production in China was strong. In the four years, the output of soda ash increased by 5.75 million tons, with an average annual increase of 10%. In the second half of 2008, due to the financial crisis, the consumption market for soda ash was depressed, but in the same period, domestic projects for the construction and expansion of soda ash were put into production in a centralized manner, and production capacity increased rapidly. By the end of 2009, China's soda production capacity has reached 23 million tons, accounting for approximately 41% of the world's total production capacity. In 2009, the output of soda ash in China was 18.70 million tons, accounting for about 42% of the world's total production.
According to statistics, as of the end of 2009, there were 46 soda ash production enterprises in China, of which 13 companies had production capacities of 600,000 metric tons/year or more, and the top ten soda ash producers accounted for 62% of the national total.
However, due to the rapid growth in the production capacity of soda ash in China in recent years, the production capacity has grown too fast and the market supply exceeds demand. Moreover, in the first three years of the “Twelfth Five-Year Planâ€, there will be more than two million tons of new soda ash production capacity put into the market every year. It is expected that by the end of 2012, the soda ash production capacity in China will reach 30 million tons.
The soda ash enterprises in China are characterized by a large quantity and small scale, especially the associative alkali enterprises. Most of them come from small and medium sized nitrogenous fertilizer companies, and their comprehensive competitiveness in the market is poor.
"In recent years, China's soda ash production capacity has grown rapidly, and overcapacity is serious. During the 12th Five-Year Plan period, more than 6 million tons of new production capacity will be put into the market, which will further exacerbate China's soda ash production capacity surplus. Competition will also intensify, and mergers and reorganizations within the industry and upstream and downstream are inevitable,†an industry expert told reporters.
Adhere to total control
In view of the surplus of the soda ash market, the plan proposes to insist on total control over the development of soda ash industry, support large-scale enterprises with high technological level, good market prospects, and have a major effect on industrial upgrading, and make them bigger and stronger through technological transformation projects and restructuring; The new project should be strictly controlled and the new soda project should be implemented after the Chinese soda industry association and other relevant parties have determined that it is in line with the industrial policy.
According to the plan, by 2015, China will control 30 million tons of soda ash production capacity and increase soda ash exports to meet market demand balance. According to the medium-term industry plan, by 2015, it will strive to reach 2.5 million tons of soda ash exports.
The plan also proposes to fully utilize and digest some of the established production capabilities, further optimize the industrial structure, and promote rational distribution and coordinated development of the eastern, central and western regions. For the eastern coastal areas with concentrated production capacity, new production capacity should be strictly controlled, focusing on breakthroughs in quality, variety, technology development, and corporate restructuring.
Affected by the recent “electricity shortage†in some regions, the price of domestic heavy soda ash has surged by 13% last week. It is expected that as the situation of power curtailment in each region becomes more and more serious and soda ash producers have successively entered the shutdown and maintenance period, the future domestic soda ash supply will remain scarce.