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China's Soda Ash Industry's Operating Rate in the First Quarter of 2009 Was 60% Which is a Significant Decline on Last Year for the Same Period with 80%

Post Time:Aug 07,2009Classify:Industry NewsView:370

China's soda ash production capacity has reached 24 million tons in 2008, accounting for 43.6 percent of global capacity. China's output reached 18.823 million tons and the industry operating rate was 78%. In the past 10 years, China's soda ash production has been grown consecutively, but the fluctuations of output growth is relatively large, the year-on-year output growth rate declined from 14.3 percent in 2004 to 6.4 percent in 2008, in particular, the output had a negative growth in November and December of 2008, by -20.5% and -22.4% respectively.

The industry operating rate in the first quarter of 2009 was 60% which is a significant decline on last year for the same period with 80%. The major reasons are: First, the market demand is still relatively weak; second, the price of soda ash is still uncertain. Since October last year, the price of soda ash and most chemical products had plummeted until the bottoming out in January 2009, in the 2009H1, most chemical products' price had rebounded 30% from the lowest point, but the price of soda ash still remains at 1100-1200 yuan / ton level, which is equalled to the cost, thus, soda ash industry is almost not profitable or even loss.

After consecutive years of high growth, the apparent consumption growth of soda ash had been slowed down in 2008. The apparent consumption CAGR of soda ash during 2000-2008 was 9.3%, but, it was only 4.8% in 2008, which is the lowest growth rate in nearly 10 years.

The main consume fields of soda ash are glass, daily chemical, metallurgy. Affected By macroeconomic environment and industry cycle, the output growth of downstream industries have declined differently. For instance, since October 2008 the production of flat glass had shrank, but, from February 2009, the output of flat glass has recovered. The downstream demand of glass are the real estate and automotive industries which have been rebounded gradually in the first half of 2009, but the transmitted benefits to soda ash industry still need at least three to six months.

After the additional capacity of soda ash has been released gradually in the last two years, soda ash industry will confront more challenges, and 2009 will be a low-profit year.

Source: businesswire.comAuthor: shangyi

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