13 September 2010 15:35 [Source: ICIS news]
PRAGUE (ICIS)--World demand for soda ash can be expected to grow at around 3% annually over the next five years, with glass production in emerging economies likely to be the major driver, a metals and minerals research consultancy said on Monday.
"Future demand for soda ash… will be led by flat glass, detergents and water treatment. The use of soda ash in mining and metals and flue gas desulphurisation might also spur increased demand," Roskill Consulting Group said in a summary of its new report, Soda Ash: Market Outlook to 2015.
"Emerging economies, particularly China and the wider southeast Asia region, but also the Middle East, south Asia and South America, will continue to provide the best opportunities for soda ash demand growth on a regional basis. The outlook for developed economies [with matured markets] is more uncertain," it added.
China, with its synthetic soda ash output, and the US, with its natural soda ash capacity, would continue to compete for sales in the deep-sea export markets of east and southeast Asia and South America, which lack sufficient domestic soda ash capacity, Roskill said.
Elsewhere, such as in Europe, soda ash rarely moved beyond the region in which it was produced, due to its low cost and high bulk characteristics, the consultants said.
This difficulty in accessing distant emerging markets could be a growing problem for European producers who were now competing with lower-cost soda ash from Turkey, the report added.
Roskill estimated that world soda ash production capacity stood at 63m tonnes/year, with operating rates recovering from the lows of 70% in 2009, but still some way off reaching the 85% seen in 2007-2008. New expansion projects, such as in China, had the potential to add 15m tonnes/year to total capacity by 2015.
"Chinese companies have expanded synthetic capacity rapidly and some are now of a size comparable with natural producers in the USA," the report said.
"China appears to be rapidly heading towards a position of substantial overcapacity, although tighter government targets for raw material and energy consumption could see some rationalisation of older capacity by 2015," it noted.
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