European soda ash fundamentals could shift as Kazan's plant fully ramps up

02 October 2018 15:37 Source:ICIS News

LONDON (ICIS)--The fifth and final line of the Kazan Soda Elektrik soda ash plant in Turkey has ramped-up after over half a year of delays.

The final line became operational in September and means that the plant is now producing at full capacity, according to a market source.

Despite the new capacity coming online, sentiment in Europe is yet to shift significantly, with fundamentals still considered balanced to tight, depending on the region.

“The market is short. [New capacity] will help the market close the gap a little bit. [The new] material is heading everywhere, all over the world,” one seller commented.

With many of the European players having attended a global soda ash conference in China late last week, the market has been quiet.

Before the conference, many players said that initial price discussions for 2019 contracts were likely to take place with buyers and sellers diverging over sentiment.

Looking ahead, the potential for fundamentals to shift as additional material becomes available in the global market after the ramping up of Kazan’s final line is a possibility, depending on whether downstream demand grows enough to ensure that the new volumes are absorbed by the market or not.

2019 price discussions are likely to increase in intensity as the fourth quarter gets underway. Annual contract discussions for 2019 are likely to be ongoing until the year’s end.

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Soda ash is used in the manufacturing of glass, detergents, chemicals and other industrial products.

Pictured: Kazan's plant in Ankara province
Source: Kazan

By Ciaran Tyler