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Turnaround success, but supply risks ahead

QuickView | General Industrials | 20 Nov 2017

The positive effect from incremental volumes under the Soda +200 project on Ciech's 9M17 earnings was offset by lower soda ash prices and raw materials cost inflation. More recently, soda spot prices in China have risen amid local supply curbs. However, supply from Ciner's new facilities in Turkey may put pressure on 2018 contract prices. Ciech's competitive response includes focus on product quality, strengthening the logistics chain and client relationships, as well as extending contract length. The company also aims to further improve product portfolio diversification. Ciech's shares trade on a 2017e P/E of 8.1x, c 40% below its peer group.