2012 was a year of mixed fortunes
for the soda ash industry. The impact of the global economic
crisis, which had been building since 2008, seemed to wait
until this year to bite deep into the soda ash market (see
Yet, while things started off
tough, soda ash bounced back towards the end of the year as the
economy started to regain strength and global exports of the
mineral for construction end markets increased.
January kicked off with
IM reporting that GHCL Ltd, one of
Indias largest soda ash producers, had been served a
closure order by the Gujarat Pollution Control Board (GPCB) for
causing heavy water and air pollution.
GHCLs 850,000 tpa synthetic
soda ash plant, located in Sutrapada, Junagadh district,
Gujarat, saw notice issued on 29 December 2011. Prior to this,
the pollution board had served a 15-day closure notice that
ended on 28 December.
With GHCL seeking an extension, the
GPCB issued a fresh notice and extended notice period to 28
A joint field inspection comprising
locals and the Gandhinagar GPCB office was conducted in
response to complaints of air and water pollution at nearby
villages including Sutrapada. The inspection revealed high
levels of pollution owing to refuse from the plant being
released into the air and water.
The growing influence of
Chinas state-owned enterprises (SOE) came under the
spotlight in April following in a letter from the head of the
American Natural Soda Ash Corp. (ANSAC) to US trade
representative, Ron Kirk.
Chinas treatment of
SOEs is of particular concern to ANSAC because nearly half
(48%) of Chinas soda ash production comes from producers
that are either fully or partially state-owned, including two
of its largest producers, John Andrews, ANSAC president
The letter followed Kirks
testimony before the House Ways and Means Committee on the US
trade agenda. During that, Kirk made clear that strong
trade enforcement, especially with respect to China, is a
priority, Andrews said.
Later that month, Edward Flynn,
president of FMC Wyoming, lent his support to a US bill put
forward to reinstate a 2%-royalty on soda ash over the current
Speaking in front of the US Natural
Resources Committee, Flynn, who also sits of the board for
ANSAC, gave a speech on the competitiveness of the US soda ash
industry, which, he said, remains far from
Flynn urged members to enact bill
H.R. 1192: The Soda Ash Royalty Extension, Job Creation and
Export Enhancement Act, which was originally raised by Rep.
Cynthia Lummis in March last year.
Soda ash mined and processed in the
US contributes nearly $1bn annually to the countrys
balance of trade, Flynn said, as well as $20m in federal
royalties and around 3,000 jobs.
The US should be allowed to compete
globally on a level playing field Flynn argued.
Since the introduction of the 6% royalty rate in January,
exports have fallen below average export levels in 2011, he
The soda ash regulatory saga
continued in July as the India Finance Ministry imposed
definitive anti-dumping duties on soda ash imports from China,
the EU, the US, Iran, Pakistan, Kenya and Ukraine.
The Revenue Department set a period
of five years for the anti-dumping duty, following a petition
filed by the Alkali Manufacturers Association of India. The
anti-dumping duty was set at a range of $2.38-$38.79/tonne.
The body had filed on behalf of
soda ash suppliers in the country, including Nirma, Gujarat
Heavy Chemicals and Saurashtra. The Detergent Manufacturers
Association of India had previously lobbied in 2011 to keep
dumping duty low.
Then, in August, Tata Chemicals
said that the global soda ash market could weaken due to a
bearish demand outlook.
The company, Indias largest
producer and global number two, said in its financial year Q1
results that while demand for soda ash was stable in the first
quarter, the demand environment could weaken.
Going forward, we see the
demand for soda ash and other industrial chemicals weakening
due to the global slowdown, R Mukundan, Tata managing
However, there is still growth in
India; with Tata saying that here demand will grow between 5-7%
in the next quarter.
Elsewhere, Mukundan said that Tata
faced unprecedented challenges during the quarter, which
adversely impacted the operating performance. This
included the flooding of the companys Magadi soda ash
plant in Kenya, following an unseasonably heavy rainfall.
The companys North American
arm Tata Chemicals North America had slowed down production due
to plant teething problems. The issue, which was
not disclosed, has now been resolved and output for June is on
par with expectations, the company added.
At the close of the summer months,
Belgian soda ash leader Solvay reported that its Italian
Rosignano soda ash plant had to decrease production due to a
shortage of water, caused by drought.
Solvays 1m tpa plant, which
is one of its main soda ash production sites in Europe, was
also affected by a shortage in local water supply.ÊOutput
has been cut since the middle of August, the company said,
although it did not say by how much.
Market conditions turned more
positive towards the end of 2012 as soda ash exports begun to
increase as the effects of the global economic downturn begun
IM reported in
September that exports of soda ash from Wyoming increased to
South America, Mexico, Canada and Asia.
Over the last few years, the
percentage of soda ash being exported has increased to half
that produced, Wyoming Mining Association director Marion
Loomis told IM, adding that the increase in
exports was due to rising demand from Asia for use in
construction and other end markets.
Theres more growth
outside than in the US, he said.
The economy is down, so soda
ash used for construction is down. The demand in Asian markets
has increased; there is just more demand in the rest of the
world than in the US, he added.
Finally, at the end of the year,
Australia-based soda ash producer Penrice Soda Holdings settled
an insurance claim relating to losses from a forced plant
shutdown at its chemical facility in Adelaide two years
The facility was shut due to the
failure of a steam supplier in October 2010. Penrice Soda
informed shareholders of the incident at the time and has since
filed for Australian dollar (A$) 3.15m ($3.15m*) in losses.
The company has now announced a
$2.5m settlement payment toward an expected $5m pre-tax loss
The settlement took longer than initially expected due
to the scale, complexity and extended duration of the impact on
the operation of the chemical facility, Penrice Soda said
in a statement.