Tianfeng Securities: Under the background of "anti-involution," focus on listed companies in the soda ash industry with cost advantages

According to the Zhitong Finance APP, Tianfeng Securities released a research report stating that China is the world's largest producer of soda ash, accounting for 51% of global production. The current industry operating rate is 80%, and the price spread is at a low level. Approximately 30% of the soda ash industry's capacity is outdated, and 10% of the capacity has energy consumption emissions below the benchmark level. Against the backdrop of "anti-involution," it is important to focus on listed companies with cost advantages. Recommended focus: Berun Chemical (000683.SZ) (The company is a leading natural soda ash enterprise in China, currently having a natural soda ash capacity of 6.8 million tons, making it the largest soda ash producer in the country; the Alashan Phase II project is expected to be put into production by the end of 2025, after which the company's total natural soda ash capacity will reach 9.6 million tons, with significant scale and cost advantages.) China Salt Chemical (600328.SH) (The company's synthetic capacity in the northwest region has certain resource and cost advantages in the industry, with a total existing capacity of 3.9 million tons. On June 17, 2025, China Salt Chemical won the mining rights for natural soda ash in the Daqintala area of Naiman Banner, Tongliao City, Inner Mongolia, for 6.80866 billion yuan. After the project is put into production, the company is expected to have an annual capacity of 5 million tons of natural soda ash, further expanding its product scale.) The main points of Tianfeng Securities are as follows: China is the world's largest producer, accounting for 51% of global production Under the influence of policies from 2016 to 2022, capacity growth has slowed, with new capacity in the past two years mainly from natural soda ash. According to Baichuan Yingfu statistics, as of 2024, China's soda ash capacity is 43.45 million tons, an increase of 1.8 million tons year-on-year, with the new capacity from 2023 to 2024 mainly being from the natural soda ash method. From the distribution of production enterprises, the soda ash industry's CR5 is 54%, consisting of Berun Chemical, Henan Jinshan, China Salt Chemical, Sanyou Chemical, and Shandong Haihua. The current industry operating rate is 80%, and the price spread is at a low level In the first half of 2025, the domestic soda ash market showed signs of oversupply, with the average industry operating rate around 80%. As new soda ash capacity continues to be released, the price spread of products is gradually declining. As of August 1, the price spread of domestic soda ash products is at the historical relative bottom range of 9.3% and 10.7% since 2009. Approximately 30% of the soda ash industry's outdated capacity, and 10% of the capacity has energy consumption emissions below the benchmark level On July 16, 2025, the Ministry of Industry and Information Technology and four other ministries issued a notice on conducting a baseline assessment of outdated devices in the petrochemical industry, with Hunan Province following up on the assessment within the province. According to data from Zhaoshang Information and Baichuan Yingfu, it is estimated that approximately 31% of the soda ash industry's capacity has been in operation for over 20 years. In addition, on February 15, 2022, the National Development and Reform Commission issued the "Implementation Guidelines for Energy Conservation and Carbon Reduction Transformation and Upgrading in Key Areas of High Energy Consumption Industries (2022 Edition)," stating that as of the end of 2020, about 10% of the soda ash industry's capacity did not meet the benchmark level. According to the "Benchmark Levels and Benchmark Levels for Energy Efficiency in Key Industrial Sectors (2023 Edition)," existing projects with energy efficiency below the benchmark level should, in principle, complete technological transformation or be phased out by the end of 2025 "Anti-involution" Background: Focus on Listed Companies with Cost Advantages The natural soda ash method has significant cost and energy consumption advantages over the synthetic method. The raw materials for the natural soda ash method are sourced from self-mined resources, requiring only coal as an energy material, without the need for other auxiliary materials. The process flow is relatively simpler than that of chemical synthesis, consisting only of physical processing, resulting in lower energy consumption and costs compared to the ammonia-soda method and the dual-soda method. Risk Warning: Risks of raw material price fluctuations, safety and environmental risks, and risks of continued economic downturn triggered by overseas economic decline