The expansion of Eti Soda’s Beypazari asset and
the Kazan Soda greenfield project, first announced in January
2013, has been the sole focus of the soda ash industry for many
years, to the extent that the annual soda ash conference was
once described to Industrial Minerals as "the Eti Soda
The addition of a combined total of 3 million tonnes per
year of soda ash to global supplies from the two sites in
Turkey was forecast by many companies to cause soda ash prices
to crash. Yet Eti Soda remained adamant that prices would not be pushed down by the opening
of its additional capacity.
The extra product volumes were forecast to reach the market
by early 2018, and while new volumes of material from Beypazari
reached the market by the fourth quarter of 2017, the Kazan
plant is still being ramped up.
Research and analysis firm IHS had predicted a fall of
€27 ($32) per tonne in the European price of soda ash due
to the new supply, but in reality there was only a "€6-7
per tonne decrease, although some contracts rolled over at the
beginning of 2018," according to one market participant.
Industrial Minerals assessed the price for soda ash, European synthetic, dense and light,
large contracts at €190-210 ($224-248) per tonne
ex-works on March 1 this year, a level that it has maintained.
It had been steady at €180-200 per tonne for at least two
years before then.
With prices now moving up, and the market bullish about
prospects for further increases, it seems that the 3 million
tpy of additional supply has been quite easily absorbed.
One reason for this is that the entry of the new supply to
the market was drawn out, cushioning its effect on prices.
Originally, the new capacity was scheduled to begin to come on stream by the
end of 2017 before ramping up to full capacity in the
early part of 2018. But midway through 2018 we are still
waiting for Kazan Soda to achieve production to match its
nameplate capacity of 2.5 million tpy.
Robust growth in global demand for soda ash, of 2.1%
annually, meant that additional supply of more than 1 million
tonnes was required in 2017, and the same increase will be
needed again in 2018. Together, these requirements mean that
one-third of the forecast additional output from Turkey will be
absorbed each year.
Meanwhile, a reduction in the volumes of China-origin
product available in the international market, brought about by
environmentally motivated production cuts, has led to a supply
shortage. The new Turkish output can help to offset this.
The fall in Chinese output coincides with a spike in demand for soda ash in the East Asian
country, which grew at 7% in 2017 according to Ciner
Resources, a subsidiary of Ciner Group which is the
world’s largest natural soda ash producer and the
parent company of both Eti Soda and Kazan.
At the same time, the arrival in Europe of soda ash produced
in the United States, before the Turkish plants came online,
softened the shock to prices that could have been created by
reduced Chinese supply, because it meant that demand was still
Delayed new supply
The expansion at Beypazari, in the Turkish province of
Ankara, raised Eti Soda’s capacity to 1.5 million
tpy from 1 million tpy, with the additional volume reaching the
market late in 2017.
The Kazan plant’s first production line became
operational late in the fourth quarter of 2017, bringing online
capacity for 500,000 tpy of its projected 2.5 million tpy. By
the beginning of 2018, there was additional capacity for 1
million tpy online across the two plants.
In mid-December, the new plant was running with three of five lines fully operational. The
fourth line has since achieved the same status, and the fifth
line is now being ramped up.
But the delays to the entry of these new Turkish soda ash
volumes allowed the market to grow in line with the new
"My sense is that the ramp-up has been a little slower than
was expected, or was indicated to the market, and that -
coupled with the growth in demand - [has allowed] the new
supply to be absorbed," Ciner Resources chief financial officer
Scott Humphrey told Industrial Minerals.
"About this time last year, all of the [new] Kazan supply
[of 2.5 million tpy] was due for the end of 2017, which
hasn’t happened," Rob Fennell, global marketing
and business development manager at American Natural Soda Ash
Co (Ansac), said. "We at Ansac have taken the stance that the
market wasn’t going to be as loose as some people
believed, and it seems we have been [more accurate] in our
"[Demand for soda ash in] China grew much faster than anyone
anticipated. Chinese soda ash demand for 2017 was predicted to
be flat or [to go] down. China accounted for 40-45% of world
demand, and that grew by 4%, which is significant," Fennell
Global demand is expected to show a compound annual growth
rate (CAGR) of 2.1% per year for the next 10 years, although
"it might be a little more robust this year," according to
With the soda ash market currently consuming 60 million tpy,
and with a growth rate equivalent to 1.2 million tpy, the new
capacity from Kazan will be wholly taken up within two
The level of Chinese production against consumption has
essentially been a determining factor in the softening of price
decreases, because of the surprising growth in demand.
Although Fennell estimated growth at 4%, against forecast
flat or negative growth, Ciner Resources chief executive
officer Kirk Milling said that demand in China increased by 7%
Fennell’s more conservative estimate of 4%
growth would mean that demand for an additional 500,000 tonnes
of soda ash in China was required in 2017 compared with the
"Robust demand in the Chinese domestic market drove down
their exports by 26% through November, compared with the
previous year," Milling said in March during a conference call
for Ciner’s 2017 financial results.
This coincides with the view from Eti Soda that Chinese
production "dropped off by 10%" earlier this year due to the
Although the exact amount of production that has been
affected is unclear, there has been less Chinese product in the
For the 12 months ending March 2018, the
country’s exports were down by almost 300,000
tonnes year-on-year, according to data from Chinese Customs.
This alone would allow 10% of Turkey’s additional
3 million tpy to be absorbed by the Chinese market.
US shipping to EU
There was another factor which helped the Turkish plants to
gain market share in Europe and to deliver product for 2018,
and which inadvertently offset the effects the market could
have felt from the predicted supply glut.
"We helped Eti Soda to seed new customers in the first part
of last year, while it expanded the Beypazari site and
delivered the greenfield opening in Kazan," Ciner Reources'
"If you look purely at export data, you can see how a lot of
product moved into Europe in 2017, more than in previous years,
and in 2016 there was barely one tonne of exports,"
Ansac’s Fennell said.
Ansac performs international marketing operations for Ciner
Group, along with Genesis Alkali and Tata Chemicals, which also
produce natural soda ash at Green River in the US state of
Data from the US Geological Survey shows that the US
exported 6.99 million tonnes of soda ash in 2017, and that four
European countries received soda ash produced in the US.
The total of 471,900 tonnes that went to Europe was split
between Belgium, which took 137,000 tonnes; Spain, 146,000
tonnes; the UK, 132,000 tonnes; and The Netherlands, 56,900
This was confirmed by one market participant, who said that
"there was one boat [from the US to Europe] very early in the
first quarter of 2018 which might have had as much as 25,000
tonnes on board." Corresponding data from the USGS showed that
the UK received 13,600 tonnes in January. No other European
country recorded receiving any exports, according to published
The effects on prices that could have come from
China’s growth in demand, robust growth in Europe
and the delayed entrance of additional Turkish product to the
market was cushioned by Ciner Group’s exports to
These factors combined to allow only nominal price decreases
and the rebounds that have been seen in the market.
New focus on China
Broadly speaking, market participants are happy with the
market as it now stands because it is stable and price
volatility has been avoided. The question now is where to find
the additional tonnes needed to meet demand growth into 2019
There are debottlenecking processes than can be applied at
Ciner’s plants in the US, which will release
another 300,000 tonnes over the next three years. There is also
"fundamentally scope" for European producers to find another
"100,000-200,000 tonnes" through similar exercises, according
to one Europe-based producer.
Genesis Alkali could also bring an additional
500,000-700,000 tpy online by expanding one of its two plants
in Wyoming, although this would require investment.
Finding additional capacity would be the best solution for
producers, given the current growth rates and the upward
direction of price movements.
Once the fifth production line at Eti Soda is fully ramped
up, the focus will be on China, because what happens there will
be the major variable influencing the demand-supply balance,
bringing an end to the Eti Soda roadshow.