Sodium carbonate prices rose by daily limit on supply-side disturbances and pre-holiday stocking. Can photovoltaic glass prices follow suit?

After the opening of trading on January 22, the most active sodium carbonate futures contract rose rapidly, briefly hitting the daily limit around 10:43 CST, then fluctuating and pulling back again, and then stuck to the daily limit again near the end of the day. The most-traded 405 sodium carbonate contract rose by 10.03% and closed at 2085 yuan/mt in the intraday trading.

Everbright Futures said that downstream stocking continued before the Chinese New Year holiday, and the order volume of sodium carbonate plants improved significantly. Demand for sodium carbonate remained high. Apparent consumption increased by 8% last week to 685,500 tons, and the gap between production and demand further narrowed. The available sodium carbonate inventory days of some downstream producers are about 7 to 13 days. There is still demand for stocking before the Chinese New Year holiday.

However, Everbright Futures also reminded that considering that the weekly output and inventory levels of sodium carbonate are continuously increasing, the supply pressure faced by sodium carbonate in the future can be significant. After the end of the pre-CNY replenishment, there is still a risk of a fall in sodium carbonate prices.

Soochow Futures said that in addition to the downstream pre-holiday replenishment, companies' price increases and supply disturbances drove up prices. It said that as the spot price of sodium carbonate continued to fall recently, companies increased prices; while operating rates remained at a relatively high level, Yuanxing's short-term production cuts have caused certain disruptions to the supply side, with an estimated weekly impact of 20,000-30,000 tons.

Therefore, Soochow Futures believes that due to supply disturbances and stockpiling, sodium carbonate prices may run relatively strong in the short term. However, sodium carbonate prices still face pressure in the medium and long term.

Xinhu Futures said that last Friday there were rumors that Yuanxing would increase the price of sodium carbonate by 200 this week. At the same time, some sodium carbonate plants were more willing to raise prices. Guangdong Nanfang Soda Ash Industrial Co. has lowered operating rates and started maintenance as planned, and Yingcheng Xindu and Jiangsu Jingshen Salt & Chemical Industry Co. have maintenance plans. The third production line of Inner Mongolia Yuan Xing Energy Co. has not yet reached production, and the fourth line is still unable to confirm the production time. At the same time, Xinhu Futures also said that the current sodium carbonate inventory remains low, and shipment and purchasing sentiment improved slightly last week.

It said that the current low inventory and large discounts has great support for the contract prices. If there is no sustained and substantial collapse of spot prices, contract prices are expected to stop falling and rebound.

Donghai Futures said that the current weekly sodium carbonate production has rebounded, the inventory inflection point is looming. The spot price is under downward pressure, and the fundamentals are showing signs of weakening.

Will the rise in sodium carbonate prices drive up photovoltaic glass prices?

According to SMM spot quotations, as early as September 2023, domestic photovoltaic glass quotations rose due to the sharp increase in sodium carbonate prices. SMM's survey showed that the cost of photovoltaic glass had been rising since July. Since the beginning of July, the price of sodium carbonate rose from about 1,900 yuan/ton to 3,400 yuan/ton. In addition, module production in September remained high in September. Under the dual support of the improvement of the cost side and the demand side, the price of photovoltaic glass ushered in a wave of rise in September. Prices of 3.2mm single-layer coating rose from 25.5 yuan/square meter at the end of August to 27.25 yuan/square meter on September 5; 2.0mm single-layer coating prices rose from 17.5 yuan/square meter to 19.25 yuan/square meter on September 4.

Later, as major domestic sodium carbonate plants resumed work and production, the increase in supply improved the market situation of tight supply, and the price of sodium carbonate also stabilized. Even at the end of September, some high prices of sodium carbonate in East China began to fall, and the transaction prices shifted downwards, weakening cost support for glasses. However, demand from modules still provided some support for glass prices at that time, so photovoltaic glass prices temporarily remained stable in October.

It can be seen that the price of sodium carbonate will indeed affect the price of photovoltaic glass to a certain extent. As for the impact of the current sodium carbonate price increase on the current price of photovoltaic glass, SMM believes that from the current fundamentals of photovoltaic glass, the cost side has little impact on it, and the demand side will have more impact. According to SMM data, domestic module production has been declining since October. As module inventories continue to rise and profits continue to decrease, the operating rates of most modules producers continue to decline, and the purchase of photovoltaic glass has also declined. Although photovoltaic glass still has support from the cost side, prices have still dropped significantly.

As of January 22, the price of 2.0mm single-layer coating was 16.3~17 yuan/square meter, and the average price was 16.65 yuan/square meter, a decrease of 2.6 yuan/square meter or 13.51% compared with the high of 19.25 yuan/square meter on September 4. 3.2mm single-layer coating reported 25.8~26.5 yuan/square meter, and the average price reported 26.15 yuan/square meter, down 1.1 yuan/square meter from the September high, a decrease of 4.04%.