Natural soda ash threat to Europe producers is reducing, says Erste

07 July 2011 16:12  [Source: ICIS news]

LONDON (ICIS)--European producers of synthetic soda ash are no longer threatened by a flood of natural soda from Turkey and the US thanks to an increase in shipping costs, Erste Group Bank said on Thursday.

“Since the second half of 2009, the soda ash market in Europe has been flooded by natural soda from the US and the [Eti Soda trona-based soda ash] facility at Beypazari, Turkey,” said Erste Group Bank analyst Tomasz Kasowicz in an analysis.

“Natural soda production costs are 30-40% lower than synthetic soda ash, on average. But economic recovery in developing countries has resulted in higher shipping costs, which make up 20-25% of the price of natural soda [and] due to that, synthetic soda ash production has become more competitive, compared with the offer of natural soda importers in Europe,” he also said.

Eti Soda, a member of Turkey’s Ciner Group, has built up its capacity at Beypazari for trona-based soda ash to 1m tonnes/year in recent years and is set to add another 700,000 tonnes/year at the site by 2013 or 2014, as well as a possible additional 1m tonnes/year at nearby Kazan by 2015, according to Raiffeisen Centrobank.

Given its proximity to Beypazari, Romania’s US Govora, a subsidiary of Poland’s Ciech, is most threatened by Turkish natural soda ash, Raiffeisen has said. US Govora has 400,000 tonnes/year of Solvay process-based soda ash capacity.

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By: Will Conroy
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