Soda ash was largely affected by
the economic struggles experienced since 2008, especially given
that many of its end markets, made up of staples such as glass,
detergents and chemicals, were hit by a crash in the housing
Weak end-user demand ensuing from
the global economic downturn has had a direct impact on global
soda ash demand and soda ash pricing - though a recovery is
starting to become evident.
Despite the hardship experienced in
recent years, many soda ash producers remain optimistic about
the future, with some expecting a rapid recovery in
consumerism, and therefore soda ash end-user demand, in
The global economic problems
did hurt the world end-use markets, and in turn, the world soda
ash producers. It appears the worst is over now and production
and consumption [levels] are increasing, Denis Kostick,
US Geological Survey (USGS) mineral commodity specialist, told
Zsig Schneider, Tata Chemicals
North America senior VP sales and marketing , echoed
Kosticks sentiment, stating: Soda ash in general is
in a slump [...] it is a commodity chemical and the pricing and
demand runs concurrent with GDP activity.
The India-headquartered company is
in a strong position to comment on global soda ash market
developments, as it operates soda ash facilities in India,
Kenya, the UK and the US, with a combined capacity of 5.5m tpa
- making it the worlds second-largest producer, after
Tata believes the soda ash market
is at the end of the down-cycle and that while prices have hit
a base rate, they are tending to go up now, the company
One of the USs leading soda
ash producers, FMC Corp. shared this optimism, saying that its
business has performed well in the aftermath of the economic
Exports continue to be an
important part of our business. Both domestic and export
pricing is up year-over-year in 2012, the company told
Global soda ash
While 2013 promises to bring change
in the form of increased demand and price rises for the soda
ash market, the supply situation is expected to remain largely
the same as the period before the economic recession hit.
China continued to dominate the
worlds soda ash supply in 2012, producing 23m tonnes in
2011, according to the latest data from the USGS. The country
was followed by the US, which produced 14.5m tonnes in 2011,
with a total value of approximately $1.3bn. China
continues to be the largest and fastest-growing market for soda
ash. Due to its size and the persistent over-capacity in the
Chinese industry, it also has a strong impact on important
markets for soda ash trade - Asia, and to a lesser extent,
Latin America, the Wyoming, US-based producer FMC Corp.
However, while the usual players
are continuing to produce in-line with expectations, there are
new entrants to the market, including some from developing
In developing countries, the
soda ash [market] is growing by 5%, in the US and Europe demand
is stable. Total growth is 2m tpa - 1m tpa in China [and] 1m in
the rest of the world, Novacarb, the France-based soda
ash producer, told IM.
Turkey is one such country that
emerged as a key soda ash producer in 2012, with more than 2m
tonnes of capacity logged in 2011.
China continues to lead the
way for new capacity coming on-stream and Turkey has emerged as
a new player with good access to European and Middle Eastern
markets, Kostick told IM.
Global soda ash
Demand for soda ash, as with many
minerals, is driven largely by the end-use markets it supplies
(see table 1) and therefore, any change to the global
economic state can have a significant impact.
End markets are vital to soda ash,
but also vulnerable to economic downturn. The minerals
main end-use market - glass - was hit hard by a crash in the
global housing market during the period 2008-2012. This
collapse caused the demand for soda ash to dip to the point
where prices for the mineral were as low as they can feasibly
Other glass-using industries, such
as automobile manufacturing, also took a knock, which again
filtered down to the soda ash demand level. Container glass
demand remained fairly steady, however, although this makes up
only a small percentage of the world glass supply.
As 2012 ends and 2013 approaches,
it appears these end markets are recovering. For example, 23
housing markets have demonstrated better year-on-year
statistics in Q3 2012 compared with Q3 2011, according to a
recent report by Global Property
Recovery of the US housing market has
been particularly evident, with growth in Q3 2012 being the
highest since Q2 2006, according to the Federal Housing Finance
Agency (FHFA),the Guide reported.
The supply and demand balance
is rebounding after the global economic problems that began a
couple years ago, Kostick said.
Soda ash is used in many
consumer products that grow parallel with the GDP and
population trends in the developed regions (US, Europe, and so
forth), whereas in lesser developed nations (parts of South
America, Asia, Middle East) the growth rates are stronger and
the demand for consumer products is favourable, he
While soda ash is beginning to rise
from the cinders created by the global economic downturn, the
market is not without its restrictions - recession or not.
One of the main challenges soda ash
faces, as with many minerals, is high logistics costs. Due to
its high bulk and low-cost value, the minerals transport
costs are an unwelcome problem, most notably in China.
Novacarb described the soda ash
market as a global business with local constraints due to
high logistic costs, adding that at present the
transportation cost makes up approximately 20% of the
minerals delivered costs.
The soda ash business is
Capex intensive and has high fixed costs, so the 2008/2009 and
the new, mid-2012 crisis [are making it difficult to maintain
our plant], the company told IM.
Novacarb, along with many other
companies, is in the process of diversifying its business
strategy in order to cope with the changing market.
New constraints in Europe,
including the CO2 emissions trading scheme, are
[adding] more costs to European producers in comparison with
others. So, our strategy is to go downstream with sodium
bicarbonate (30% profitable growth per year during the past
four years) and other areas (detergent products), the
The soda ash industry in the US has
also had to deal with growing competition from China, which is
dominating the supply to the Far East markets, Kostick told
Despite the ups and downs
experienced by the soda ash market during the past four years,
the outlook for this mineral remains positive.
Some of the worlds leading
producers are predicting an uptick in prices at the beginning
of 2013, as a recovery in the minerals main end markets
Soda ash demand will continue
to grow, particularly in Asia and Latin America, as these
economies continue to develop, and construction activity grows
along with increased demand in soda ash for detergents and
chemicals, FMC Corp. told IM.
Demand is also expected to
grow in North America, with a recovery in the housing sector,
which is already underway, the company added.
I believe the market is
recovering, but is still about another two years away from
where the markets used to be, Kostick told
I am, and always have been, gung ho on the future of
soda ash, he added.
Table 1: Soda ash end uses
Glass (flat and container)
The glass industry is the largest
consumer of soda ash - especially the glass container (bottles,
jars and so forth), flat glass and automobile sectors. The
mineral is used in glass manufacturing as a fluxing agent as
the sodium oxide content helps to reduce the temperature at
which the raw materials, such as silica sand, melt. During the
manufacturing process, the soda ash decomposes to sodium oxide
and carbon dioxide, which rises through the glass melt and
helps to mix the ingredients.
The inorganic chemicals
industry is the worlds second-largest consumer of soda
ash. Some examples of these chemicals are:
Sodium bicarbonate (baking
soda): is used as a household consumer product and is
manufactured by percolating CO2 gas through a
carbonation tower containing a soda ash solution. Approximately
0.68 tonnes soda ash is needed to make one tonne sodium
Sodium hydroxide (caustic
soda): is mainly produced as a co-product with chlorine gas in
the electrolysis of salt brine in mercury, diaphragm, or
membrane cells. Non-electrolytic caustic soda, also known as
chemical caustic soda, is produced by Green River soda ash
producers in Wyoming, US. Chemical caustic soda is produced by
the reaction: Ca(OH)2 + Na2CO3
CaCO3 + 2NaOH.
Sodium sesquicarbonate: is
a hydrated compound containing soda ash and sodium bicarbonate.
This chemical is mainly sold to the detergent
Sodium chromates: is formed
by roasting chrome ore with soda ash in a rotary kiln to
produce sodium chromate or sodium bichromate. For every tonne
of sodium bichromate produced, 0.79 tonnes soda ash is needed.
Sodium chromites are used in leather tanning, pigments, wood
preservatives, drilling mud additives and more.
Sodium phosphates: have
exceptional cleaning properties and are used in baking powder,
carbonated beverages, milk products, dental materials,
fire-retardants, metal surface treatments and water
Sodium silicates: is
produced from silica sand and soda ash in a process similar to
glass manufacture except that the sodium silicates are water
soluble and glass is not. Sodium silicates are used in soaps
and detergents, silica-type catalysts and gels, pigments, paper
adhesives, water, paper, ore treatment and other end
detergents Soda ash is used both directly and
indirectly in detergents. Firstly, it is used as an
agglomerating aid, surfactant carrier and source of alkalinity.
Secondly, it is used as a feedstock to enhance the cleaning
action by tying up the calcium and magnesium ions to improve
surfactant activity. Lastly, soda ash is used to soften laundry
Pulp and paper
Soda ash is used in pulp digestion and bleaching operations and
in paper-coating formulations.
Soda ash is used to chemically alter the pH of municipal and
industrial water supplies, and as a precipitant to remove
impurities in brine and industrial process water.
Source: Industrial Minerals and
Rocks, 7th Edition
Quick soda ash facts
Soda ash, the trade name for sodium carbonate
(Na2CO3), is a white, anhydrous, powdered
or granular material. It is an essential raw material used in
the manufacturing of glass, detergents, chemicals and other
Soda ash has been used for
thousands of years and its industrial manufacture began in the
There are two types of soda ash:
natural and synthetic. Natural soda ash, refined
from the mineral trona, is regarded
as the standard for quality and purity and is also processed
from sodium-carbonate-bearing brines. Synthetic soda ash is
manufactured using a number of different chemical
Soda ash also comes in three main
grades: light, medium and dense. These have the same chemical
properties and only differ in physical characteristics, such as
bulk density, particle size and shape.
Soda ash pricing levels have also been largely impacted by
the economic state, with low demand pushing prices down. Now,
as the economy begins to recover, prices are expected to
Pricing in North America, South America and Europe has been
relatively flat through 2012, while in China and the rest of
Asia, excluding India, prices have declined significantly
during the year due to a slowdown in demand growth, FMC Corp.
Towards 2013, pricing is expected to be up in North and
South America, and relatively flat in Europe, the company said,
adding that in Asia, levels have hit the bottom, with Chinese
producers selling below cash costs just to keep their plants
This is unsustainable, particularly in face of rising
costs, and consequently prices in China and Asia are expected
to rise over the course of 2013, it said.
Increased global demand, along with rising costs of
synthetic soda ash production [particularly in China], will
lead to an environment of continued upward pressure on soda ash
prices globally, the company added.
Natural soda ash is expected to continue to have a
delivered-cost advantage relative to synthetic soda ash in all
regional markets, FMC Corp. said.
In fact, this competitive advantage is expected to
grow, it added. The USGSs Kostick saw further
reason for optimism.
Domestic pricing of soda ash is about $130-$140/s.ton
in the US for this year. With exports now exceeding domestic
consumption, soda ash producers are experiencing better prices
than before. I do not believe the price will go down, pending
another recession that might result from the Fiscal
Cliff the US may have next month, he said.
Tata Chemicals, which is also positive about prices going up
in 2013, believes its business is relatively protected from the
negative impacts of market fluctuations.
Tata Chemicals business is predominantly based in
low-cost, natural production, so were not as exposed as
synthetic producers elsewhere in the world. Our soda ash
business is still doing pretty well, the company told
| IMs list prices for soda ash can be seen
in the table below:
Tata expects pricing to improve in Q2 2013, if not
[...] there will still need to be some inventories
that will need to be picked up before [pricing increases], but
[our] view is [that it will happen in the] second quarter of
2013, the company said.
If you look at the end-use markets that have a direct
impact on glass consumption, it would be housing and
automotive. When you see those end markets pick up, youll
see an increase in soda ash demand to the segments that supply
that, the company added.