Conditions right to raise Europe soda ash prices - producer

14 April 2011 16:25  [Source: ICIS news]

LONDON (ICIS)--Conditions are right to increase soda ash prices in Europe because of rising costs and healthy demand, France-based producer Novacarb said on Thursday.

On 31 March, Novacarb announced a 10% price increase for light and dense soda ash, effective for second-quarter and biannual contracts. However, the company has achieved little more than €10/tonne ($14/tonne) so far for second-quarter settlements, a company source said.

The source added that high energy costs are eroding margins and, with global demand for soda ash picking up because of the economic recovery, Novacarb believes it is necessary to implement the price initiatives now.

“The timing is critical as costs are exploding and business is good,” the source said.

However, customers said growth in Europe is far slower than in Asia and Latin America, with the market oversupplied. They said this is especially true in the downstream flat-glass sector, because the European construction industry remains stagnant.

Buyers agree that the European market is oversupplied, saying they are able to source all the material they need.

Novacarb noted that demand for dense soda ash in Europe is back to levels seen in 2008 and, while recovery is not as rapid as in other regions, sales are strong.

Dense soda ash is currently priced at $315–345/tonne (€217–238/tonne) FOB (free on board) NWE (northwest Europe), according to ICIS.

Novacarb operates a 600,000 tonne/year soda ash production plant near Nancy, France.

($1 = €0.69)

For more on soda ash, visit ICIS chemical intelligence

By: Amandeep Parmar
+44 208 652 3214

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