Global soda ash market will grow 3.8% in 2013 - producer

08 March 2013 16:33  [Source: ICIS news]

LONDON (ICIS)--Global demand for soda ash grew by 1.8% in 2012 and is expected to grow by 3.8% in 2013, although Europe will only see growth of around 1.0-1.5%, a Turkish soda ash producer said on Friday.

"Most of the growth will come from South America, India, Russia and the US, and Europe will remain the weakest market in the world," the seller said.  

In addition, there could be major developments in Europe in the near-term if caustic soda consumers switch to using soda ash, which is considerably cheaper, a western European producer said.

The seller said not all downstream industries will switch because it is complicated and not all applications can use soda ash instead of caustic soda - but those that can, will do because of the cost advantage.

"Industries that can switch are those that use caustic soda for pH control and need a base material," the producer said.

Soda ash is traded at $270-340/tonne (€205-258/tonne) free delivered (FD) northwest Europe (NWE) depending on grades and packaging. Caustic soda is at $430-450/tonne free on board (FOB) NWE.

The western European producer went on to say that Turkish producer Ciner's plans to increase production capacity in Beypazari and Kazan, Turkey, could potentially make the European market long if fundamentals do not change by then.

Ciner will invest $1.35bn in a new soda ash plant with a nameplate capacity of 2.7m tonnes/year in Kazan, to meet increasing global demand. The source added the additional capacity could be offset by plant closures by Belgium-based Solvay, which plans to shut its soda ash units in southern Europe as a result of poor downstream offtake.

This was echoed by the Turkish producer which said the Kazan expansion - if its came online today - would definitely make the market long. However, as it is so far in the future it is nearly impossible to predict what effect, if any, it will have on the market, the producer added.

With weak offtake from the flat glass and construction industries and low growth expected in Europe, there is a possibility the market will lengthen. However, if Solvay indeed decides to close down its plants in southern Europe in 2013, the length in the market could reduce.

($1 = €0.76)

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By: Janos Gal
+44 208 652 3214



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