Soda ash prices and market analysis

The soda ash market in Europe and the US is balanced. European demand is expected to fall during 2013 because of the continued weakness in the downstream flat glass industry.

A sustained period of relatively high and volatile oil prices plus increasing transport costs in recent years have prompted soda ash producers to raise their price last year, but they could not keep the momentum going in 2013 as demand is so poor. As most contracts are negotiated annually, there is little flexibility for rapid price changes in the market.

While business conditions in the downstream detergents sector is steady and the container glass sector is strong, the flat glass industry remains weak in Europe and China. Business in Africa, Asia, Latin America and the Middle East is performing much better.

Global overcapacity, particularly in China, has created fierce competition in the marketplace. US and Turkish manufacturers have some advantage here as they mine natural soda ash, which is much cheaper to produce than the synthetic version.

European synthetic soda ash manufacturers have faced strong competition from competitively priced imports from Turkey during 2012 and this will only intensify in coming years as there are massive capacity expansions planned in Turkey. Turkish plants are producing low-priced natural soda ash and one is due for a 1m tonne/year expansion in 2013.

Updated to mid-February 2013