US soda ash firms still mull pricing strategies

HOUSTON (ICIS)–US soda ash producers are in the process of working on strategies for 2017 pricing, one market participant said on Tuesday.

One producer said that it is very difficult to predict what will happen during the second half of 2016. But it will have to make the best decision regarding supply and demand and the many other variables in the global marketplace.

The market will set its own price, based on supply and demand, one producer said.

Producers typically make price increase announcements at the beginning of Q3, as some negotiations begin at the end of Q3. Last July four producers separately announced price increases for 2016 – in order to let the market know what their pricing intentions were for this year.

As expected, US soda ash exports rose in February from the previous year and the previous month, according to recently released statistics by the US Census Bureau.

US soda ash exports in February were up by 8.5% from the same month a year earlier, and were 13.3% higher than they were in January, according to US Census Bureau data.

However, the expected month-on-month jump in exports to Asian countries did not happen in February, but it could still have happened in March, some market sources said.

US companies shipped 184,300 tonnes of soda ash to eight Asian countries in February, which was down by 4.5% from January, the data said. Year on year, exports to Asia were up by 30% in February.

China’s largest soda ash producing plant was taken off line unexpectedly in February, which caused a ripple effect in the countries that the plant exported product to.

On 1 February Chinese producer Shandong Haihua shut down its 3m tonnes/year soda ash complex at Weifang, in Shandong province, due to leaks caused by bad winter weather. About half of the 3m tonnes/year of soda ash produced at the complex is exported.

The producer has two plants at the site – one with a capacity of 1.2m tonnes/year, and the other with a capacity of 1.8m tonnes/year. The smaller plant was restarted on 27 February, while the larger plant began operating at around half of capacity at the end of April.

Historically, the US has not exported soda ash to China as it has been an oversupplied market.

North American soda ash producers include Ciner Resources, Industria del Alcali, Searles Valley Minerals, Solvay Chemicals, Tata Chemicals and Tronox.