Soda Ash Market Hit Record Levels in 2013

LONDON, October 9, 2014 /PRNewswire/ --

In 2013, estimated consumption of soda ash reached a record of almost 54Mt following growth in most regions outside North America.  Compared to 2004, when global consumption was 40.4Mt, it has grown at an average growth rate of 3.2%py.  The growth rate started to fall in 2012 and this continued into 2013 as consumption in the major regional markets slowed.

Capacity shift to China and the USA 

At the end of 2013, total active production capacity stood at an estimated 67.5Mtpy, of which 50.5Mtpy or almost 75% was synthetic.  Synthetic soda ash capacity waslargely located in East Asia (59%) and Europe (19%).  The remaining operations exploit naturally occurring sodium compounds, mainly trona, and are restricted to the USA, China, Turkey and some countries in Africa.  Most capacity based on natural soda ash is located in the North America (77%).

In China, there are a reported 11 soda ash projects under construction that have a total capacity of 6.25Mtpy and are intended to enter service before the end of 2015.  Projects at the planning stage have a total capacity of 7.4Mtpy.  By 2018, Chinese capacity could conceivably rise to well in excess of 40Mtpy compared to the 31Mtpy reported at the end of 2013.  The domestic market is highly unlikely to be able to absorb the production from the extra capacity.  In the past, Chinese producers have been able to export excess production but the production cost advantage of US companies means that this will become increasingly difficult.

US producers are also increasing capacity in order to support the growingexport market.  Solvay and FMC have both announced plans to increase capacity and Tata intends to debottleneck its operation.  Falling domestic natural gas prices have made some US producers more competitive by reducing their cash costs, which mayalso encourage them to expand further.

Soda ash projects in Saudi Arabia and Oman are intended to supply regional consumers, particularly those producing flat glass.  These projects have the advantages of low cost energy and potentially good access to supplies of salt and limestone.  The opening of these plants may reduce regional imports and could redirect some material from Turkey to other markets.

In Turkey, capacity at Eti Soda is scheduled to rise by 0.35Mtpy to an eventual 1.6Mtpy.  The opening of the Kazan project in 2017 would add a further 2.5Mtpy of capacity.  This increase in supply of low cost soda ash and sodium bicarbonate is likely to lead to further closures of synthetic plants in the area, particularly in southern Europe.

By contrast, in Europe there have been a series of synthetic plant closures in the UK (2014), Portugal (2014), Romania (2010), Netherlands (2009), Austria (2005) and Germany (2000).  Production has also ended in Brazil (2007) and Australia (2013).  Since 2000, some 6.9Mtpy of global capacity has closed but this has been more than offset by new plants and expansions that have added 7.6Mtpy to the global total.

Changes in the industry structure 

The most important change in the industry structure in the last five years will be the sale by FMC of its Green River operation in the USA, which was announced in August 2014.  This has a capacity of around 3.75Mtpy or over 5% of the global total as well as a suite of other products.  No details of potential buyers have been announced to date.

Apart from this announcement, Solvay of Belgium remains the single largest producer from a capacity of around 8.5Mtpy despite closing a number of synthetic operations in Europe over the last decade.  Tata of India has emerged as the second largest producer following its purchase of Brunner Mond in 2006.  

Glass remains largest market for soda ash… 

Global consumption is strongly influenced by the global glass industry, which accounted for an estimated 28.4Mt of total soda ash consumption in 2013 or 53%.  The glass industry remains concentrated in Asia and to a lesser degree Europe and North America.

The largest market for soda ash is in flat glass, which is heavily reliant on use by the construction sector.  Growing urbanisation of populations in emerging economies, particularly China, has stimulated consumption of flat glass in construction.  In transport, the main market is in automotives, production of which recovered in 2010 and later years to over 87M units in 2013. Growth in construction activity and automotive output is forecast to average around 4%py to 2018.  Flat glass production is forecast to rise at a similar rate, reaching around 70Mt by 2018.

Container glass is still a major market for soda ash but increasing useof cullet, particularly in developed countries, has reduced its importance.  Lightweighting has also effectively reduced the amount of container glass required to produce a given number of bottles.  Competition with other forms of packaging has meant that beer bottles have become increasingly important to container glass producers.

…..But others showing higher growth levels 

Consumption of sodium bicarbonate by the food industry is rising, as is that in industrial applications such as flue gas desulphurisation.  A number of European based synthetic soda ash plants have switched some production to sodium bicarbonate away from soda ash because of its higher value.  The use of soda ash in metal and mineral processing has shown a substantial increase, mostly in China and the CIS.  Soda ash is used in the processing of a number of metals and minerals, including lead.

Roskill's new Soda Ash: Market Outlook to 2018 report contains full estimates for 2013, profiles on major producers and projects, an assessment of key market trends and an outlook for supply, demand and prices to 2018. 

This latest edition is available at a special price, until the 17^th of October,  of £4680 / US$7470 / €5580 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44-20-8417-0087, Email: info@roskill.co.uk  Web: http://www.roskill.co.uk/soda-ash.

Note to editors 

Roskill Information Services Ltd. of London, UK is a leading provider of multi-client and bespoke market research services to the minerals and metals industry.

The new soda ash report provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.

For further information on this report, please contact Alison Saxby, asaxby@roskill.co.uk or +44-20-8417-0087.