Over the next five years, solar salt prices in Asia will be driven by strong growth in chloralkali production to meet the growing demand for PVC in construction, aluminium in auto-manufacturing and paper & pulp in packaging.

Although the China CIF price for salt has remained fairly flat through 2022, it continues to trade up more than 40% versus the same period in 2021. An extended monsoon reduced the 2022 salt harvest in Gujarat, India, resulting in an estimated 30% reduction in production. The short-term outlook for salt prices is balanced by weak supply on the one hand, with adverse weather affecting China's sea salt production, and weak chloralkali and soda ash demand resulting from high energy prices and zero-COVID measures in China.

The medium to long-term outlook for CIF China salt prices is largely driven by strong demand growth forecasts in Asian chloralkali production, which we forecast to grow at an annual rate of 3.7% through to 2027, to represent more than 50% of Asian salt demand. With Indian exports potentially restricted through to 2023, imports from the likes of Australia and Mexico will make up any shortfall. From 2025 and beyond, new Australian, Indian and Pakistani exports will increase supply and begin moving the market into balance.

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