Tianfeng: The cost and energy advantages of natural alkaline method are prominent, focus on listed companies with cost advantages.

Tianfeng released a research report stating that, in the context of "anti-internal competition," focus on listed companies in industries with cost advantages. The cost and energy consumption advantages of natural alkali method over synthetic method are highlighted. The raw materials for the natural alkali method come from self-mining in mines, except for coal as an energy source, no other raw materials are needed. The process is relatively simpler compared to the chemical synthesis method, it is only a physical processing process, with lower energy consumption and lower costs compared to ammonia alkali method and soda ash method. Key points from Tianfeng: China is the world's largest producer, accounting for 51% of global production. Under the policy influence from 2016 to 2022, capacity growth has slowed down, and in the past two years, new capacity has mainly focused on natural alkali. According to Baichuan Yingfu statistics, by 2024, China's soda ash production capacity will be 43.45 million tons, an increase of 1.8 million tons year-on-year, with the main increase in capacity from 2023 to 2024 being in the natural alkali method. In terms of production distribution, the CR5 of the soda ash industry is 54%, with Inner Mongolia Berun Chemical, Henan Jinshan, CNSIG Inner Mongolia Chemical Industry, Tangshan Sanyou Chemical Industries, and Shandong Haihua being the main players. Current industry operating rate is at 80%, price differentials are at a low level. In the first half of 2025, the domestic soda ash market is facing oversupply, with the industry's average operating rate at around 80%. As the new soda ash capacity continues to be released, the price differentials are gradually decreasing. As of August 1st, the price differentials of domestic soda ash products are at historically low levels, at 9.3% and 10.7% since 2009. Around 30% of the soda ash industry's outdated capacity, with 10% of the capacity having energy consumption emissions below the benchmark level. On July 16, 2025, the Ministry of Industry and Information Technology and five other ministries issued a notice on conducting a survey of outdated equipment in the petrochemical and chemical industry, with Hunan Province following up with a provincial survey. According to Sublime China Information and Baichuan Yingfu data, we estimate that about 31% of China's soda ash industry capacity is over 20 years old. Furthermore, on February 15, 2022, the National Development and Reform Commission issued the "Guidelines for Energy Saving and Carbon Reduction Transformation and Upgrade in Key Areas of High-Energy Consumption Industries (2022 Edition)." By the end of 2020, about 10% of the soda ash industry's capacity had not reached the benchmark level. According to the "Industrial Energy Efficiency Benchmark Level and Benchmark Level (2023 Edition)," for existing projects with energy efficiency lower than the benchmark level, they should ideally complete technical transformation or elimination by the end of 2025.