In China's soda ash industry, which is featured by oversupply, weak demand, and intensified homogeneous competition, how to achieve a transformation and leap from "price competition" to "value optimization"? The answer lies in driving green manufacturing through technological breakthroughs, establishing green benchmarks via energy conservation and carbon reduction, realizing win-win cooperation through ecological construction, and exporting Chinese solutions through global layout.
1. Changed Supply-Demand Dynamics: Industry Under Operational Pressure
In 2025, the soda ash market will continue to show operational characteristics of abundant supply, weak demand, and price pressure. Weak downstream demand is intertwined with the release of new production capacity, industrial inventories remain high, and the market as a whole is in a cyclical adjustment phase.
Supply Side: Sustained Capacity Growth – Domestic total soda ash production capacity exceeded 40 million tons in 2024. In the first three quarters of 2025, soda ash output reached 28.639 million tons, a year-on-year increase of 4.931 million tons, with an average daily output of 104,500 tons. Since the start of 2025, domestic soda ash production capacity has increased by over 2 million tons, and there are still 3.5 million tons of new capacity planned to be commissioned in the near future. In addition, the capacity share of the domestic natural soda ash industry is moving towards 30%.
Demand Side: Lack of Growth Momentum – The core downstream of soda ash is float glass, whose demand accounts for 35% to 40% of the total soda ash demand. The main application scenarios of float glass are the real estate and construction sectors. In the first half of 2025, the floor area of new housing starts decreased year-on-year, leading to insufficient growth momentum in soda ash demand in this field. Another important downstream sector, photovoltaic glass, accounts for 10% to 15% of total soda ash demand. Due to squeezed industry profit margins, its short-term driving effect on soda ash demand is relatively limited.
The adjustment of supply-demand relations is directly reflected in inventory changes. Since March 2024, soda ash inventory has risen from 400,000 tons, peaking at 1.9 million tons, and has remained above 1.4 million tons since then. After entering 2025, although inventory levels have fluctuated occasionally, they have generally stayed in a relatively high historical range. As of November 27th, the total inventory of soda ash manufacturers was 1.409 million tons, and the inventory in delivery warehouses was 583,800 tons.
2. Intensified Homogeneous Competition Drives Industry Breakthrough
Under the pattern of oversupply and weak demand, the problem of product homogenization has become prominent. Some enterprises have adopted price competition strategies, which have squeezed the overall profit margins of the industry and increased the pressure for transformation and upgrading.
Price Decline Pressures Industry Profits – In October 2021, the price of heavy soda ash hit a historical high of 3,681 yuan per ton. In the third quarter of 2025, the domestic heavy soda ash price index fluctuated between 1,218.57 and 1,344.29 yuan, while the light soda ash price index fluctuated as low as 1,152.86 to 1,285.71 yuan. In September 2024, the profits of the soda ash industry turned negative for the first time, and in July 2025, it fell into a loss-making situation again. In the fourth quarter of 2024, the net profits attributable to shareholders of half of the listed companies in the industry were negative, and by the second quarter of 2025, the loss ratio still reached 25%.
Natural Soda Ash Emerges with Cost Advantage – Its capacity share has risen from 5% in 2022 to 17% in 2025, and its unit cost is much lower than that of the combined soda ash process and ammonia-soda process. This absolute cost advantage will enable natural soda ash to gain an advantageous position in future market competition.
As the world's largest producer and consumer of soda ash, China's production capacity accounts for more than half of the global total. However, the industry has long been trapped in homogeneous competition. The key to breaking the deadlock lies in technological upgrading and service optimization to break the "price reduction - loss" cycle and enhance the comprehensive competitiveness of enterprises.
3. Clear Transformation Path for Value Competition Breakthrough
"Competing by lowering prices will eventually lead to a dead end; competing by enhancing value will open up a bright future!" Yu Wenyi emphasized that with the upgrading of technology and intelligence, value competition will replace price competition and become the key to breaking the deadlock in the soda ash industry.
It is urgent to restructure the value chain and promote industrial upgrading. At present, the industry's production capacity of high-value-added products that meet the needs of high-end fields such as new energy is still insufficient. This requires enterprises to move up to the high end of the industrial chain through technological innovation and service upgrading.
Technological Innovation as the Core Driver – The industry is focusing on the R&D of key technologies such as clean production of ammonia-soda process, efficient extraction of natural soda ash, and comprehensive utilization of resources. For example, China National Salt Industry Corporation is committed to building an intelligent production system and exploring circular economy technologies such as "producing soda ash from industrial waste salt". Jiangxi Jiuling Lithium Industry has successfully utilized by-products from lithium extraction from lepidolite to produce soda ash and ammonium sulfate, realizing efficient resource utilization.
Energy Conservation and Carbon Reduction to Build Green Benchmarks – By implementing energy-saving technological transformations and promoting equipment such as waste heat recovery, the energy consumption and emission intensity of the soda ash industry are expected to decrease significantly. Technological transformation projects of some leading enterprises are expected to achieve a substantial reduction in comprehensive energy consumption per unit product and annual carbon emission reduction of tens of thousands of tons.
Industrial Ecosystem Construction for Win-Win Cooperation – Enterprises are shifting from independent operation to cooperative development. Industry leaders such as China National Salt Industry Corporation have taken the lead in holding industrial technology seminars, collaborating with upstream and downstream enterprises and research institutions to jointly build a collaborative innovation ecosystem. By developing high-end products such as low-iron soda ash for downstream photovoltaic glass enterprises, differentiated market spaces can be effectively opened up.
Global Layout to Export Chinese Solutions – China's advanced soda ash production technology is going global along with the Belt and Road cooperation. For example, Indonesia's first soda ash project adopting China's Hou's soda ash process (combined soda ash process) has officially started construction. This is not only the export of mature industrial technology, but also contributes to the diversification and resilience of the global soda ash industrial chain.
Looking to the future, China's soda ash industry will build a comprehensive competitive advantage centered on "technology, brand and service" by continuously enhancing the supply capacity of high-end products, promoting green processes, and deepening the integration of the value chain. It will establish a more important position in the global market and ultimately achieve a win-win situation of economic and environmental benefits.
