31 December 2007 08:45 [Source: ICIS news]
By Hong Chou Hui
SINGAPORE (ICIS news)--Asian soda ash spot prices for 2008 could hit a high of $400/tonne (€272/tonne) Asia by the second quarter on the back of continued strong demand and tight supply, market participants said on Monday.
“The price trend for this year speaks for itself. The supply situation certainly isn’t going to get any better while demand isn’t going to cool off next year,” said a southeast Asian trader.
“Besides, there’s no substitute for soda ash in the market so a new high of $400/tonne CFR [cost and freight] for spot cargoes wouldn’t surprise anyone.”
He added that ?xml:namespace>
Even with new capacities starting up in
Preparations for the Beijing Olympics in 2008 and a building boom in the
Likewise, a healthy global economy has contributed to the growth of the middle class in
“India's Tata Chemicals bought [Kenya's] Magadi (Soda) for the purpose of exporting its products to southeast Asia but ended up having to divert the soda ash cargoes into India due to its force majeure so that highlights how critical the supply situation was,” said the trader.
Soda ash values hovered slightly below the $200/tonne CFR Asia mark early 2007 as abundant exports originated from
On 1 July, the Chinese government reduced export tax rebates for its chemical products in a move aimed at cutting down the trade deficit with the
With high freight rates and competitive domestic prices, Chinese soda ash producers therefore opted to reduce their exports to
Within the same month,
Both companies declared force majeure and have only recently resumed full production.
These events combined to push soda ash spot prices past the $250/tonne mark which resulted in a flood of orders for sellers of European and
Contract prices of soda ash have been concluded at $230-270/tonne CFR Asia recently, up 21-35% year on year.
According to market sources, this was in line with market trends as soda ash contract prices have always lagged behind spot prices by $30/tonne CFR Asia.
On the other hand, another industry source said that the
“The spot price of soda ash will probably peak at around $350/tonne CFR Asia by the middle of 2008. That’s when the Chinese requirements for soda ash will take a dip and the full effects of the
Soda ash is used to manufacture glass and detergent, and both industries are booming in
($1 = €0.68)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections