Price and market trends: Tata Chemicals UK soda ash closure will tighten the market

18 October 2013 09:50 Source:ICIS Chemical Business

Tata Chemicals’ decision to close its 500,000 tonne/year soda ash facility in Winnington, UK sometime during the second half of 2014 will either tighten or balance the European and UK soda ash markets, sources said on 
11 October.

The company decided to close the plant, in the northwest of England, because energy costs are high and it needs to reduce costs in the current tough economic climate. The production of soda ash is very energy intensive and with current high energy costs it has become unviable to run the plant, a company source said.

It said that they might have to import soda ash from the US to be able to supply all their customers from the second half of next year, but this will not result in a price drop because including delivery and other charges the imported product will be about the same price as locally produced material.

A western European producer said that the announcement is another sign that the 
European industry is struggling and that producers are doing everything to balance a long market and return to profitability.

It added that Tata’s cut and the closure of Solvay’s 500,000 tonne/year plant in Povoa, Portugal plus the reduction in output at Solvay’s Rosignano, Italy plant could take out about 1.5m tonnes of soda ash supply next year, which will either balance or tighten the market depending on downstream demand.

Soda ash is mainly consumed by the flat glass industry, which has been hit by a downturn in construction and automotive output.

Soaps and detergents and container glass demand is stronger, with regional differences.

By Janos Gal