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By the end of 2007, China's soda ash production capacity is expected to reach 18.5 million tons, with an output of 17 million tons. In 2008, three new plants are set to come online. Based on historical capacity utilization rates and market conditions, it is projected that soda ash output in 2008 could reach 18.5 million tons, up from 17 million tons in 2007. This represents a growth of 1.5 million tons, or an increase of approximately 8.82%. In 2007, domestic shipments rose by 9.52%, marking one of the lowest growth rates in recent years and falling below the GDP growth rate for the following year.
It is estimated that GDP will grow by around 10.5% in 2008. Given the historical correlation between domestic soda ash consumption and GDP growth, consumption of soda ash is also expected to rise by about 10% in 2008. The primary driver of this demand has been flat glass, particularly due to continued real estate development and increased use of double-glazed windows. Additionally, higher glass exports are anticipated, leading to an expected growth in flat glass production of 12% to 15%. Meanwhile, daily glass, including bottles for beer and wine, is expected to maintain a growth rate of around 15%.
However, the appreciation of the yuan may limit export growth. In the first three quarters of 2008, the domestic soda ash market is expected to experience slight tightness. Three more companies are scheduled to start operations in the third and fourth quarters, which may lead to a more balanced supply-demand situation by the end of the year. Overall, the market is expected to remain largely balanced throughout 2008.
On the cost side, rising prices for raw materials, energy, and transportation are putting pressure on production costs. With both cost-driven and market-driven factors at play, the average price of soda ash in 2008 is likely to be higher than in 2007. This trend reflects broader economic pressures and the need for producers to adjust pricing strategies accordingly.
October 08, 2025