US soda ash supply to remain tight in '09 - FMC

29 October 2008 16:56  [Source: ICIS news]

HOUSTON (ICIS news)--US soda ash supplies will remain tight and prices high in 2009 despite a darkening economic outlook for the year, soda ash producer FMC said on Wednesday.

Soda ash will be insulated from slowing global economies and tightened credit conditions, company CEO Bill Walter told investors.

“Even with the slowing economy, we have seen no decline in demand besides that in the North American housing and automotive sectors, which were largely felt in 2007 and 2008. The environment out there today remains such that US producers are sold out, and the world is operating tight,” he said.

Walter said synthetic soda ash production projects, mainly in China, had been deferred or cancelled, meaning no significant new supply would be available.

At the same time, FMC would continue its plans to bring back on line 100,000 tonnes of mothballed capacity at its Granger plant in Wyoming by 2009 and additional capacity by 2012. The company could re-mothball that capacity if the market deteriorates, he added.

Walter declined to say how much of a price increase soda ash producers expected to realise in ongoing 2009 contract negotiations. Producers have nominated prices of $260/ton (€266/tonne) FOB (free on board) Wyoming, up by nearly 60% from $145-185/ton, according to global chemical market intelligence service ICIS pricing.

FMC reported on Tuesday net profit of $80m, up 116% from $37.1m reported for the same time last year, due to higher prices for soda ash and phosphates.

It raised its 2008 earnings outlook to $4.55/share from $4.45/share and said it expects fourth-quarter earnings to be 85-95 cents/share.

($1 = €0.79)

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By: Ben Lefebvre
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