US soda ash production rebounds in October, September exports up

19 December 2013 00:00 Source:ICIS News

The bottle glass industry is among the downstream sectors of soda ashHOUSTON (ICIS)--US soda ash production rebounded in October after dipping 14% in September on planned and unplanned outages at the industry’s mining center in southwestern Wyoming, according to data available on Thursday from the US Geological Survey (USGS).

US production hit 1m tonnes in October, only the second month that the industry has reached the seven-digit milestone this year, according to the USGS numbers.

That came after output had dipped to 857,000 tonnes in September, the lowest production month of the year and coming just as US producers sought to maximise production to keep up with a slow but steady global economic recovery, the USGS figures revealed.

October production surged up 17% from September’s low point for 2013, according to the report. It may be enough to put the US industry on pace to surpass its all-time production record of 11.3m tonnes of annual production set in 2008.

However, the industry will have to come close to repeating the 1m tonnes for November and December to reach that mark, having cranked out 9.51m tonnes in the first 10 months of this year and 11.1m tonnes for all of 2012, according to the USGS figures.

Perhaps even better news for the industry, US consumption remains level with 2012, with US buyers having taken 3.69m tonnes so far for the year, matching last year’s figures for the period, the figures showed.

US consumption has steadily declined in recent decades as more aluminium containers replace glass bottles for beverages and soap and detergent makers trend toward liquids rather than powder. Glass consumes more than 40% of US domestic consumption and chemicals use more than 30%.

US soda ash exports for September, the most recent month for which figures are available, were down 13% month on month and down 12% from September 2012. Exports for the year, though, are up 7.4%, to 4.81m tonnes through September, the USGS figures show.

More than half of US soda ash has been sold as exports since 2010, according USGS data. The average value of September shipments was $185/tonne (€135/tonne), for the most part to very large volume buyers.

Mexico is the largest customer with 736,000 tonnes received so far this year. Brazil, is second with 668,000 tonnes and Indonesia third, with 529,000 tonnes. Mexico is likely to be down slightly this year, but Brazil is up significantly and Indonesia up slightly.

Other important customers include Canada, Chile, Japan and South Korea.

Soda ash is a mature industrial commodity and its growth follows macroeconomic trends. Besides glass, chemicals and soaps and detergents, soda ash is used for water treatment, pulp and paper manufacturing and flue glass desulphurisation.

Global production is up 20% since 2009. The US enjoys a production cost advantage because the nation's soda ash is processed from a mineral, trona, rather than through a synthetic chemical process in most other parts of the globe.

US trona mining and processing operations are centered in southwestern Wyoming and in southern California.

Major US producers include FMC Wyoming, OCI Wyoming, Tata Chemicals (Soda Ash) North America, and Solvay Soda Ash in Wyoming and Searles Valley Minerals in California.

($1 = €0.73)

By Bill Bowen