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The growing demand in the domestic market and a good international market trading environment are the main reasons for the constant soaring domestic soda market. At the same time, the increase in energy costs has contributed to the increase in the market price of soda ash. Although the exchange rate of the renminbi has continued to increase, due to the price reduction of crude salt of raw materials and the reduction in production costs, it has not caused too much impact on the soda ash market.
In February, the local supply of soda ash in the local market experienced varying degrees of supply and demand imbalances, and there was a shortage of supply in parts of Central China. Although soda ash producers raised the operating rate of production facilities to the highest level, they still could not alleviate the contradiction between supply and demand. In March, the domestic soda ash market price may continue to rise, but the pace will gradually slow down. The main factors affecting the soda ash market in March are:
Impact of rising energy This will still be the driving force behind the rise in soda ash prices. In order to rectify the domestic coal production order and strengthen the management of coal production and safe production management, the state has strengthened the strict rectification of small coal mines. All localities are specifically implementing the banning of small coal mines. The decline in the overall supply of the coal market will have an impact on the price increase. The Ministry of Finance and the State Administration of Taxation issued the Circular on Adjusting the Tax Rates for Coking Coal and Salt Resources on February 7, 2007, which was approved by the State Council. Since February 1, 2007, the coke resource tax rate has been reduced from the original average of 3.2. Yuan rose to 8 yuan, the cost of coal increased by 4.8 yuan, which is about 10% of the current coal price. 70% of China's electricity production is thermal power, and the coal-electricity linkage mechanism will inevitably affect the cost of electricity. In February, domestic coal prices rose by an average of 5%. Coal prices still rose in March and affected the market price of soda ash.
The impact of the logistics environment In recent years, China's national economic development has always maintained at more than 10%. The speed of development of railway transportation is only 4%, which obviously lags behind the speed of economic development. This situation will continue to continue for some time in the future. During the domestic spring holidays in February, tensions in the Spring Festival will be spread to March. Tight rail transport will inevitably affect the transport of soda ash and cause soda price instability in March.
Impact of exports From the statistics of import and export last year, the total amount of soda ash exports accounted for 11.33% of total production. From January to February, from the perspective of the export situation of soda ash producers, we still maintain a good situation. At present, the international crude oil market price is still at a relatively high price, which will benefit domestic exports of soda ash and increase the competitiveness of the international market. Soda ash exports will continue to show rapid growth in March, and the increase in export volume will promote the soda ash market price.
Effect of upstream raw materials In February, the domestic crude salt market under the influence of oversupply pressure, the market price of raw salt in some areas showed an unstable decline, and the prices of major crude salt in Shandong and Hebei dropped by 5 yuan and 10 yuan respectively, a drop of 5.2%. The drop in prices this time may trigger a new round of national salt price declines. The original salt market price in March may continue to decline.
Soda ash market remains strong
In February, during the general sluggishness of the chemical market in the Spring Festival, the domestic soda ash market demand continued to show a strong trend, and prices also kept rising. The average price of the market rose by 5 yuan (t price, the same below), heavy soda 1,650 yuan, and light soda 1,500 yuan.