According to the Zhitong Finance APP, Xinda Securities released a research report stating that by August 2025, the price of heavy soda ash will drop to the range of 1335-1349 yuan/ton, and light soda ash will drop to the range of 1213-1257 yuan/ton. The price decline has led to negative industry profits, with the soda ash industry experiencing its first negative profit in September 2024 and again in July 2025; the performance of listed companies has significantly declined, with some companies facing losses. On the demand side, the dual pressures of real estate downturn and short-term fluctuations in photovoltaics are evident. In terms of flat glass, the real estate sector is the main drag, while automotive demand provides support; for photovoltaic glass, there are short-term &#34;anti-involution&#34; fluctuations, but long-term growth remains unchanged. However, the industry's &#34;anti-involution&#34; requires efforts in three areas: supply optimization, demand stimulation, and policy guidance. Given the significant characteristics of the industry bottom, it is recommended to pay attention to companies with cost advantages.
<h2>The main points of Xinda Securities are as follows:</h2>
Soda Ash: One of the &#34;three acids and two alkalis,&#34; it is an important basic chemical raw material widely used in construction materials, petrochemicals, food, and other fields.
From the demand side, glass is the core downstream sector, with the apparent consumption of soda ash reaching 35.96 million tons in 2024, of which flat glass accounts for 46% (16.39 million tons), making it the largest application field; photovoltaic glass accounts for 21% (7.52 million tons), surpassing daily glass (12%, 4.31 million tons) to become the second-largest demand field.
Soda ash prices have significantly declined, putting pressure on the industry.
After reaching a peak of 3681 yuan/ton in October 2021, the price of heavy soda ash began a new downward cycle in Q4 2023 due to factors such as new production capacity coming online. By August 2025, the price of heavy soda ash will drop to the range of 1335-1349 yuan/ton, and light soda ash will drop to the range of 1213-1257 yuan/ton. The price decline has led to negative industry profits, with the soda ash industry experiencing its first negative profit in September 2024 and again in July 2025; the performance of listed companies has significantly declined, with some companies facing losses.
In Q4 2024, 50% (4 out of 8) of listed companies reported negative net profits attributable to shareholders, while in Q1 2025, the loss ratio was 37.5% (3 out of 8), and in Q2 2025, the loss ratio was 25%. Year-on-year, performance has significantly declined. As of August 15, 2025, the national soda ash factory inventory was 1.67 million tons, slightly down from 1.84 million tons in February, but still at a historical high. The industry operating rate dropped from nearly 90% in April 2025 to around 80% in August, with limited inventory reduction effects.
Supply side: Natural soda ash mines trigger changes in production capacity structure.
Since 2023, the production capacity and output of soda ash have accelerated growth. In 2023, production capacity exceeded 40 million tons (up 19.5% year-on-year), reaching 43.45 million tons in 2024, with a capacity increase of 24.6% over the two years of 2023-2024; output also increased, reaching 36.21 million tons in 2024 (up 21.4% year-on-year), marking the highest growth rate since 2007. In the first seven months of 2025, cumulative output was 21.3 million tons (a slight increase of 0.91% year-on-year).
The production capacity structure is undergoing significant changes, with the proportion of natural soda ash increasing from 5% in 2022 to 16% in 2024, and further rising to 19% in the first seven months of 2025. Among the new production capacity added in 2023-2024, natural soda ash accounts for 56% (after excluding replacement capacity), and in the planned capacity after 2024, natural soda ash will account for 70%. Berun Chemical's Inner Mongolia Yingen Mining (Phase I 5 million tons,
Phase II 2.8 million tons), China Salt Chemical Tongliao Naiman Banner (5 million tons) and other projects are the main sources of incremental growth. Natural soda ash maintains full production due to its cost advantages of &#34;no need for raw and auxiliary materials, simple process, and low energy consumption,&#34; even during price downturns, leading this round of supply expansion.
Demand Side: Dual Pressure from Real Estate Downturn and Short-term Fluctuations in Photovoltaics
Flat Glass: Mainly Dragged by Real Estate, with Support from Automotive Demand. 70% of flat glass is used in construction, making demand highly correlated with real estate. The construction area in real estate is expected to decrease by 12.7% year-on-year in 2024, and by 9.2% in the first seven months of 2025, which is the core reason for the weak demand for flat glass; however, the growth in automotive glass demand (accounting for 15% of flat glass) provides support, with China's automobile production reaching 18.07 million units (up 10.5% year-on-year) in the first seven months of 2025, and new energy vehicle production reaching 8.04 million units (up 32.9% year-on-year).
Photovoltaic Glass: Short-term &#34;Anti-Competition&#34; Fluctuations, Long-term Growth Unchanged. The production of photovoltaic glass is expected to reach 27.34 million tons in 2024 (up 30.92% year-on-year), driving an additional demand of 1.5 million tons for soda ash, but overcapacity has led to a decrease in the operating rate from 75% in 2022-2023 to 61% in 2024, with prices declining simultaneously; the average price of 3.2mm photovoltaic glass is expected to drop from 25-27 yuan/square meter in Q2 2024 to 18 yuan/square meter in Q4 2025. In the long term, global and China's new photovoltaic installed capacity is steadily increasing, and the demand for soda ash from photovoltaic glass will maintain long-term growth potential.
Process and Regional Differences Determine Different Competitive Landscapes. Significant Cost Gaps Exist Among Different Processes, with Natural Soda Ash Establishing the Industry Cost Floor.
The unit cost of the natural soda ash method is the lowest, with China's natural soda ash enterprises' unit cost expected to be around 1,000-1,200 yuan/ton in 2024, the joint soda ash method around 1,400-1,600 yuan/ton, and the ammonia soda ash method around 1,500-1,700 yuan/ton. Regionally, areas rich in natural soda ash, raw salt, and energy such as Inner Mongolia and Henan have significant cost advantages. After considering transportation costs, the cost of purchasing soda ash from external sources in consumption areas like East China and South China increases by 100-200 yuan/ton.
&#34;Anti-Competition&#34; Path: The Industry's &#34;Anti-Competition&#34; Needs to Focus on Three Aspects.
First, supply optimization, accelerating the exit of high-cost ammonia soda ash and joint soda ash capacities, controlling low-level capacity expansion, and allowing natural soda ash enterprises to further reduce costs through economies of scale; second, demand stimulation, expecting real estate policy easing to drive a recovery in flat glass demand, and after the photovoltaic industry &#34;anti-competition,&#34; capacity clearing and demand returning to growth; third, policy guidance, relying on &#34;dual carbon&#34; policies to promote the improvement of industry energy consumption standards, eliminate backward capacity, and encourage the development of green processes such as natural soda ash.
Target Aspects
In the context of significant industry bottom characteristics, it is recommended to pay attention to enterprises with cost advantages, such as Berun Chemical (000683.SZ) (formerly Yuanxing Energy), and China Salt Chemical (600328.SH), which has acquired natural soda ash assets.
Risk Factors
Real estate downturn exceeds expectations; photovoltaic installed capacity growth falls short of expectations; risk of significant raw material price increases; policy implementation does not meet expectations

600328

000683

Xinda Securities released a research report indicating that the price of soda ash continues to decline, with the price of dense soda ash dropping to 1,335-1,349 yuan/ton and light soda ash falling to 1,213-1,257 yuan/ton, leading to negative industry profits. The industry is expected to turn negative for the first time in September 2024 and again in July 2025. The performance of listed companies has significantly declined, with some companies facing losses. It is recommended to pay attention to companies with cost advantages and emphasizes that the industry needs to address pressures through supply optimization, demand stimulation, and policy guidance

Cinda Securities: Soda ash prices continue to bottom out, focus on the industry's "anti-involution" efforts