FocusEurope soda ash gains on detergent demand

05 December 2008 12:49  [Source: ICIS news]

By Stuart Moir

LONDON (ICIS news)--Soda ash has the potential to overtake its competitor products next year, especially in the detergent industry, market participants said on Friday.

“Recent shutdowns by plastics companies mean that chlorine production is extremely low,” a European producer said.

“Over the next half-year the caustic soda market will tighten and prices will rise. We might see many producers switching to soda ash in 2009.”

The European soda ash market has so far resisted the effects of the global financial crisis, with stable demand reported and producers currently running their plants at near full capacity.

The detergent industry, which comprises roughly 10% of European soda ash consumption, shows no sign of decreasing.

According to market players, the application of soda ash in the detergent-manufacturing process will rise over the course of 2009.

As the chemical industry focuses more on environmentally friendly practices, soda ash seems an eco-friendly alternative to caustic soda in detergent production.

Caustic soda is a base chemical that can cause chemical burns and blindness, whereas soda ash is biodegradable and a far less corrosive source of alkalinity.

Soda ash is also effective at removing hard ions from water, an important characteristic for a detergent.

Although soda ash could seem to be a logical replacement for caustic soda, there is an obstacle: making the switch could involve a potentially costly structural change for production facilities.

“Caustic is added to the detergent process as a liquid,” a major European producer said.

"Soda ash is a powder. It has to be transported to and within the site, made into a solution, and once at the necessary level of alkalinity it can then be pumped.

“You are adding another step, when it might seem easier to use drums of liquid caustic.”

However, the switch from caustic to ash is now being considered an economically feasible option, as a growing disparity in price between the two chemicals has developed.

Caustic soda has risen continually against soda ash in 2008, and is currently assessed by global chemical market intelligence service ICIS pricing at $650-660 (€507-515)/DMT (dry metric tonne) FOB (free on board) NWE (northwest Europe).

Prices for light soda ash bags are at $315-325/tonne FOB NWE, slightly under half the price of caustic soda.

Higher energy costs in 2008 mean that soda ash producers will be looking to raise prices by around €40-50/tonne in 2009.

Producers said this would not affect soda ash’s competitive edge, believing that the swing potential was in soda ash’s favour and still worth the hassle of plant alterations.

Buyers shared this opinion.

“Soda ash is an inexpensive filler to enhance the storage and dissolving properties of detergent. It is safer, more stable, and more cost effective than caustic, and is a good carrier of surfactants and dyes. It’s got a bright future in the industry,” said a buyer.

The use of soda ash in other applications such as pulp and paper manufacture, chemical production, flue gas desulphurisation and carbon capture technologies was also increasing, market players said, pointing to a bright outlook for 2009 despite the chemical industry downturn.

($1 = €0.78)

For more on soda ash visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stuart Moir
+44 20 8652 3214

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