Asia’s soda ash prices firmer led by higher offers from China

07 March 2018 12:12 Source:ICIS News

SINGAPORE (ICIS)—Asia’s soda ash prices were largely firmer owing to higher discussion levels led by firmer offers from China.

A combination of factors such as a strong yuan versus the US dollar, concerns of environmental impact regulations, taxes on production costs in China and a looming plant soda ash turnaround season in China contributed to the firmer pricing outlook.

China-based producers adopted strict price discipline as the recent price correction phase was deemed to be unsustainable.

While some suppliers deemed inventory levels on producers’ side to be healthy, the impending plant turnaround season in summer as well as concerns on the impact on production costs owing to an environment or ‘green tax’ amid the government’s measures to combat pollution contributed to a cautiously bullish outlook.

Suppliers of dense grade material raised offers to $240-260/tonne free on board (FOB) China for March and April shipments, reflecting a $5-10/tonne week-on-week hike, depending on the producer source. Discussions were ongoing with buyers in southeast Asia.

Buying interest for dense grade material in south Korea was constrained to second-half April deliveries due to ample inventories in the wake of the Lunar New Year demand lull.

A couple of major producers in China said they were focusing on domestic sales, after most producers implemented a yuan (CNY)30-50/tonne hike on dense grade soda ash this month to CNY1,700-1,800/tonne on a delivered basis.

During the week ended 28 February, China’s export prices were assessed at $230-240/tonne FOB China for dense grade and at $$225-235/tonne FOB China for the light grade material, unchanged from the previous week, ICIS data showed.

By Helen Lee