Chemical Profile - SODIUM BICARBONATE

03 May 2004 00:01  [Source: ICB Americas]

 

SODIUM BICARBONATE

May 3, 2004

US PRODUCER	CAPACITY*
American Soda, Parachute, Colo.	150,000
Church & Dwight, Green River, Wyo.	220,000
Church & Dwight, Old Fort, Ohio	280,000
FMC, Green River, Wyo.	90,000
Natrium Products, Cortland, N.Y.	15,000
Natural Soda, Rifle, Colo.	125,000
Total	880,000

*Short tons per year of sodium bicarbonate. Sodium carbonate is either soda ash-based, where sodium carbonate is reacted with carbon dioxide, or solution mined from nahcolite (natural sodium bicarbonate) using hot water that is injected into the ground formation.

DEMAND

2002: 562,000 short tons; 2003: 577,000 short tons; 2007: 637,000 short tons, projected. Demand equals production plus imports (2002: 16,000 short tons; 2003: 17,000 short tons) less exports (2002: 69,000 short tons; 2003: 67,000 short tons).

PRICE

Historical (1998-2003): High, $22.80 per cwt., USP powder, regular grade, c.l., bags, frt. equald.; low; $21.80 per cwt., same basis. Current: $22.80 per cwt., same basis. Market pricing is two tier with USP and food grades at the top (differentiated product), earning the biggest margins, and animal feed and industrial grades (nondifferentiated) priced somewhat lower.

GROWTH

Historical (1998-2003): 2.3 percent per year; Future: 2.5 percent per year through 2007.

USES

Food, 33 percent; animal feed, 27 percent; pharmaceuticals and personal care, 9 percent; cleaning products, 8 percent; chemicals, 8 percent; water treatment, 6 percent; paint blast media, 3 percent; fire extinguishers, 2 percent; miscellaneous (including oil well drilling, pulp and paper, leather tanning), 4 percent.

STRENGTH

Over the years, sodium bicarbonate has turned in steady growth. The major reason for this continuous success is that food (mainly as a baking leveling agent) and animal feed (mainly as a ruminal pH buffer) account for 60 percent of its market demand, and these sectors are recession proof. Producers have also been successful in the personal care and cleaning products sectors with introducing new products based on bicarbonate, such as deodorants and air fresheners. Sodium bicarbonate is a highly functional product with a relatively high value-to-cost ratio. Only a small amount may be used in a given application, but it can be critical to end-use performance. Demand growth for these two segments is projected to be 2.5 percent per year. Though only a relatively small segment, blast media at 3 percent of total demand, this sector is growing at nearly 10 percent annually. Sodium bicarbonate has become a substitute for more hazardous paint removal media such as organic strippers based on methylene chloride. Its use produces cost savings based on reduced operating and lower disposal costs. Demand has also grown in unconventional uses such as graffiti removal. Sodium bicarbonate has several applications in water treatment that encompass swimming pools, potable water and wastewater. Projected growth in this sector is 3 percent annually.

WEAKNESS

Sodium bicarbonate is used in the manufacturing and processing of a variety of chemicals: as a buffer for manufacturing in neutral pH ranges; as a catalyst and reactant in a number of chemical production processes; as a blowing agent in the production of foamed rubber and plastics and as a stabilizer for various chemicals during transportation and storage. This sector, however, is the slowest growing of all bicarbonate’s application areas. Only 0.7 percent annual growth is projected over the forecasted period. Exports too have been flat, averaging about 70,000 tons per year, plus or minus 3,000 tons with the exception of a spike in 1999 when exports reached 80,000 tons that year. Exports are anticipated to hold steady at 70,000 tons per year.

OUTLOOK

Population growth and product innovation in consumer uses will largely be responsible for fueling the future demand growth of sodium bicarbonate. As the substance is essentially recession proof, there should not be any noticeable surge in demand as the economy continues its recovery—just steady predictable growth. Presently, the industry is operating at less than 70 percent of capacity. Nevertheless, producers will be looking for higher pricing on off-schedule purchases, justified by increased energy and transportation costs. Over the forecasted period, aggregate demand is projected to be 2.5 percent per year.

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