US soda ash producer declares force majeure after earthquake

HOUSTON (ICIS)–Searles Valley Minerals has declared force majeure on soda ash after an earthquake disrupted water and electrical service and severed rail and highway links, shutting down all operations at the complex.

The company said that it is inspecting the damage and organising repairs. Some service may be restored before others.

A market source familiar with the company’s operations said that further news may be forthcoming later this week.

The company did not say full operations may resume. Almost two weeks after the event, electrical service is still sporadic.

The company did not say whether it had stocks on hand or the ability to provide partial shipments to customers during the near term.

The outage at the plant and force majeure come as the US soda ash market prepares for 2020 annual contract negotiations. The outage will provide another wrinkle to discussions.

Global markets have been amply supplied, with new production from Turkey helping to push prices in Asia lower. Asia is a major buyer of US soda ash.

It has been expected that this year’s contract discussions would be focused on price declines. But the supply disruption in California could crimp US domestic supplies rather than export volumes.

US producers typically make price nominations by this time of year ahead of contract discussions in the autumn. Those negotiations are usually completed by December to govern deliveries for the following year.

Searles Valley is owned by Indian conglomerate Nirma and, with 1.2m tonnes/year production capacity, holds 11-13% of total US production capacity.

Major US producers of soda ash include Ciner Group, Genesis Alkali, Searles Valley, Solvay and Tata Chemicals.

The image above shows a window, which is made of glass. Soda ash is used to make glass. Photo by Al Greenwood