US soda ash producers test price hikes in an uncertain market

03 July 2013 21:14  [Source: ICIS news]

HOUSTON (ICIS)--Rebounds in the domestic auto and construction industries are giving US soda ash producers increasing confidence as they continue to test higher off-list prices, sources said on Wednesday.

US auto manufacturers announced robust sales growth for June, estimated at an annual pace of 15.7m vehicles, the best rate of sales since 2007.

The automotive and flat glass industries are two of the most important markets for soda ash sales.

The reports of increased economic activity come as Tata Chemicals North America on Tuesday announced a $10/short ton (€8/short ton) increase for bulk and packaged products.

On Monday, FMC July implemented a $15/short ton off-list price increase for packaged and bulk soda ash products.

In April, the American Natural Soda Ash Association (ANSAC) announced a price increase of $30/tonne on soda ash sales.

ANSAC, the sales and logistics operation for three natural soda ash producers in the US, said the hike was effective immediately for all non-contract sales and on contract sales when notice allows.

Buyers questioned whether the price hikes will stick when the annual contract comes up for renewal beginning with negotiations in September, pointing to weakening global markets, particularly in China.

China’s purchasing managers’ index (PMI) dropped to 50.1 in June, down from 50.8 May, indicating a further slowdown in the country’s manufacturing activities, official data showed.

The new orders index declined by 1.4 points to 50.4 in June, and production index dropped to 52.0, down by 1.3 percentage points from the previous month, according to the China Federation of Logistics & Purchasing (CFLP).

Bulk prices for soda ash this week were assessed by ICIS as steady at $180-200/short ton FOB (free on board) US Gulf (USG).

($1 = €0.77)

By: Bill Bowen
+1 713 525 2653

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