Supply Situation Report: Economic recovery boosts soda ash demand

By Emma Hughes
Published: Monday, 22 April 2013

Unlike some industrial minerals, which are unique to certain areas of the Earth, soda ash, or sodium carbonate, is mined and produced all over the world. Indeed, at least 95 natural sodium carbonate deposits have been identified globally - yet not all of these have been quantified.


Unlike some industrial minerals, which are unique to certain areas of the Earth, soda ash, or sodium carbonate, is mined and produced all over the world. Indeed, at least 95 natural sodium carbonate deposits have been identified globally - yet not all of these have been quantified.

There are two types of soda ash - natural and synthetic. The former is obtained from trona and sodium carbonate-rich brines, while the latter can be manufactured from salt and limestone, a process which is often more cost-intensive and can generate environmentally damaging wastes.

Both forms of soda ash are used for end-use solutions of glass, detergents, chemicals and environmental applications.

In terms of global soda ash supply, China continued to dominate in 2012, producing 23m tonnes in 2011, according to data from the US Geological Survey (USGS). The majority of this supply was synthetic soda ash.

China was followed by the US, which produced 10.9m tonnes in 2012, with a total value of approximately $1.6bn. The US has approximately 23bn tonnes proven natural soda ash reserves.

Turkey produced 1.6m tonnes in 2012, Botswana produced 250,000 tonnes and Kenya produced 600,000 tonnes, USGS figures show. Other countries contributed 260m, making a world natural rounded total of 24bn.


While China leads the way in terms of soda ash production, the majority of this supply is synthetic - which is currently more expensive to provide and less environmentally friendly due to the waste generated during the manufacturing process.

However, while China has, to date, been the major producer of synthetic soda ash, the country’s Bureau of Geology and Mineral Exploration of Henan Province has recently announced the discovery of a large trona soda ash deposit in Tongbai County in Nanyang, Henan, China.

If the reports on this deposit are substantiated, it could become the largest trona deposit in Asia with 72m tonnes of identified resources, with an additional 100m tonnes trona mixed with mirabilite, the USGS suggests.

This development could strengthen China’s position as the world’s largest supplier of soda ash, but its progression in the soda ash market has caused some controversy overseas due to the help it receives from the Chinese government.

Soda ash producers in China currently receive a 9% rebate on the 17% value-added tax on Chinese soda ash exports, providing them with a significant advantage over US suppliers, who believe the differential VAT rebates “encourage the overproduction and export of soda ash”.

On 2 April 2012, John M Andrews, president and CEO at ANSAC, the world’s largest soda ash exporter, wrote to US Trade Representative Ron Kirk, emphasising the need for the Obama Administration to continue to focus on China’s industrial policies that “rely on trade-distorting government actions to promote or protect China’s state-owned enterprises”.

Andrews noted that “nearly 50% of China’s soda ash capacity comes from producers that are either fully or partially state-owned, including two of its four producers”. These producers allow China to overcome the comparative advantage US soda ash producers have “with serious implications in third-country markets”, he said.



The US holds the world’s largest discovered deposit of trona, located in the Green River Basin of Wyoming. This site is home to four companies, operating from five plants, who together have the opportunity to work with an estimated 56bn tonnes bedded trona at the site, where 47bn tonnes of identified soda ash resources could be recovered.

The mineral resource sits within 47bn tonnes of interbedded or intermixed trona and halite in beds more than 1.2 meters thick. These resources are being depleted at the rate of about 15m tpa, producing 8.3m tonnes of soda ash, according to the USGS.

Searles Lake and Owens Lake in California, US, also contain large quantities of soda ash at estimated 815m tonnes reserves.

While the US contains this large resource, the competitive advantage China holds due to the VAT rebates has been noted. This issue has for several years been a priority to the United States Congress and has also been the subject of discussions on numerous bilateral government-to-government agendas, including the Joint Commission on Commerce and Trade (JCCT).

Following these discussions, US soda ash producers found at the beginning of 2013 that they could gain equal footing with Chinese competitors following the introduction of a bipartisan bill that would provide the US soda ash industry with temporary royalty relief.

Congresswoman Cynthia Lummis introduced the American Soda Ash Competitiveness Act bill on 5 March, to “reduce temporarily the royalty required to be paid for sodium produced on Federal lands, and for other purposes”.

“The royalty rate on the quantity or gross value of the output of sodium compounds and related products at the point of shipment to market from Federal land in the five-year period beginning on the date of enactment of this act shall be 2%,” the bill outlined.

A similar bill last year made it out of the Natural Resources Committee on a bipartisan vote. That same committee held a hearing on 21 March to discuss the merits of this legislation prior to a mark-up being held later this spring.


Turkey is leading soda ash development within Europe having produced 1.6m tonnes in 2012 and 1.5m tonnes soda ash the year before. The country holds more than 200m tonnes of soda ash reserves, according to USGS data.

“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,” Dennis Kostick, a former soda ash specialist at the USGS, told IM.

The country’s Ciner Group signed a $1.35bn-deal with China Tianchen Engineering Corp. (TCC) in January to build the world’s biggest soda ash facility in Turkey’s capital city, Ankara.

The production facility, which will produce 2.5m tpa dense soda ash and 200,000 tpa sodium bicarbonate, is expected to be up-and-running by early 2017.

“With this investment, finally a Turkish industry company will be the number one in its segment in the whole world,” Turgay Ciner, Ciner Group president, said during the signing ceremony.

Ciner currently produces soda ash at its subsidiary Eti Soda in Ankara’s Beypazari district. The capital city is home to the world’s second-largest trona reserves, at 1.34bn tonnes, after Wyoming, US. Eti Soda has exported $1bn worth of soda ash to 53 countries since 2009 and expects the new facility to increase this amount to $1.75bn per annum. The project, which will be located in Ankara’s Kazan district, will be financed with project loans from Chinese banks and be powered by natural gas.

Ciner also revealed that several supply contracts have already been negotiated.

“Three of our biggest customers have signed a contract with us to purchase natural soda ash from us until 2023 [É] I cannot disclose their names, but new companies could be added to this list,” he said.


Belarus could soon make its way onto the global soda ash market under a joint-venture agreement with Russia, according to the Belarus Architecture and Construction Minister, Anatoly Nichkasov.

Speaking at a press conference in Minsk in February, Nichkasov said the soda ash can be sold both in Belarus and in the neighbouring countries.

“We will team up with Russian partners to set up a Russia-Belarus transnational company manufacturing [soda ash],” Nichkasov said.

Belarus previously signed an agreement with Chinese investor CNCEC in 2010 to help fund the construction of a soda ash plant in the Mozyr District of Gomel Oblast, southern Belarus. Chinese CNCEC was set to fund the 300,000 tpa facility, which was designed to produce soda ash for both domestic and international use.

The Mozyr District is home to the largest rock salt deposits in Belarus, with estimated reserves thought to be around the 22bn tonne mark. Belarus later penned a further agreement with Bashkortostan, a federal subject of Russia.

“There is an opportunity to build a plant with 300,000 tpa capacity, with the potential to reach 600,000 tpa capacity, to cover the demands of the European region,” Belarusian Prime Minister Mikhail Myasnikovich told reporters in June last year.

“This area is completely new to us. We are pleased that our colleagues from Bashkortostan have agreed, even at the initial phase of the project, to provide engineering support, so the project does not go off track [É] Belarus has the investment [for this project],” he added.


Six unnamed companies located outside of Tanzania have placed bids to set up a $500m soda ash plant at the country’s Lake Natron, according to its National Development Corp. (NDC).

Interest in developing a soda ash plant at the Lake Natron site has been building for several years due to the Lake’s soda ash reserves, which are thought to be around 4.7bn cubic metres. The deposit holds the potential to produce 1m tpa soda ash, bringing significant financi al benefit to the local area.

The wetland management plan and environmental assessment study for the proposed project are due to be completed by June 2013, according to the NDC. However, previous plans to develop the site have been stopped due to environmental protest as the site is located on the nesting ground for around 33% of the world’s lesser flamingo population.

Previous bids for the project include India-based Tata Chemical Industries Ltd, which submitted a proposal to the Tanzanian government in 2006 for a $450m, 500,000 tpa soda ash factory. The company produces more than 5m tonnes of soda ash, both light and dense grades (together with some speciality grades) with a balanced portfolio of natural and synthetic production.


As is the case with many industrial minerals, the supply and demand of soda ash is driven, on a global scale, by its end-use markets. These include glass, detergents, chemicals, pulp and paper, and water treatment.

The glass market used 48% of the US soda ash supply last year, according to USGS 2011 reported data, while chemicals used 29%; detergents 8%; distributors 6%; flue gas desulphurisation and miscellaneous uses 3% each; pulp and paper 2%; and water treatment 1%.

“Glass is [soda ash’s] biggest market and is stable; detergents is the second [biggest market] directly or indirectly (sodium silicate, sodium percarbonate) and is increasing (2-3% per year [due to the] ban of sodium tripolyphosphate),” Novacarb, Euorpe-based soda ash specialist, told IM.

Glass was hit hard by a crash in the global housing market during the period 2008-2012, as well as a dip in automobile manufacturing, which significantly reduced the demand for soda ash.

However, the global economic state is now improving, which has in turn buoyed the soda ash supply situation, with soda ash suppliers around the world noting improved demand for their products.

“Demand in most mature markets was under some degree of stress, whereas in developing, growth markets, demand remained healthy, though somewhat below historical growth rates. All markets, however, are now reviving and the supply-demand balance across geographies is restoring,” Zarir N Langrana, Tata Chemicals’ Business COO, told IM.

“Strong fundamental growth in the developing regions of the world will continue to drive growth for this essential product, which is the building block for many key industries that are linked to economic growth and urbanisation. New applications for the product are also being seen in certain emerging sectors,” he added.

Solvay, which produces soda ash as part of its Essential Chemicals business, added that soda ash “demand growth is directly linked to the dynamism of the soda ash main markets. We are seeing a slowdown in Europe, whilst an acceleration growth in others countries”.

“Demand for soda ash in fast-growing markets - North America, eastern Europe, Africa and Middle East - is dynamic, while demand is weak and depressed in western and southern Europe,” Pascal JuŽry, Solvay's Essential Chemical president, told IM.

“Soda ash serves resilient consumer-good-end markets, with exposure to new housing construction and auto industry. Even if at this time [when] the consumption market is still below our expectations, we do believe there is a window of opportunity in fast-growing countries,” he added.

While soda ash demand is improving in some areas of the world, the situation is not so positive in Australia. Penrice Soda Holdings Ltd, one of the country’s leading suppliers, has announced that it will close its Adelaide-based soda ash manufacturing facility in June this year after experiencing “increasingly difficult domestic trading conditions”.

According to Penrice, the strength of the Australian dollar, lower international shipping costs, increased energy and labour costs and increasing taxes, have all made the import of soda ash more than 40% cheaper than producing domestically.

“These same pressures are also playing out across Penrice’s soda ash customer base [É] Penrice does not see any significant change to these factors occurring in the foreseeable future,” the company said.

“These factors have combined to reduce the profitability of Penrice’s soda ash business, which continues to make a considerable loss in financial year 2013. The uncertainty [É] has led the company to decide to import soda ash rather than manufacture it,” it added.

In line with its strategy to begin importing soda ash into Australia, Penrice has signed a memorandum of understanding (MoU) with SASS Victoria Australia Ptd Ltd (SASS), a subsidiary of Dutch company Soda Ash Holding Co, which is the world’s largest independent distributor of soda ash per year.

The joint venture (JV) will be split between SASS and Penrice, with share ownership of 67% and 33% respectively, over a minimum period of six years. SASS will provide Penrice will an Australian dollar (A)$8m ($8.4m*) loan to fund the cost of transition.

The soda ash for the JV will be sourced from ANSAC, which imports around 4m tpa natural soda ash.


Soda ash pricing levels have also been largely impacted by the global economic state, as low demand pushed prices down. Now, as the economy begins to recover, prices are levelling out and are expected to improve as the year progresses.

“Pricing in most markets have remained stable, with some markets beginning to show an upward sustainable trend,” Tata Chemicals told IM.

“Prices in Europe and North America have increased modestly on average, reflecting higher input costs,” Solvay added.

“Global trade markets have seen some price decreases, starting with South-East Asia, where supply has exceeded demand in a context of growth slowdown. However, prices are already rebounding in Asia, as demand levels improve,” Solvay told IM.

Novacarb agreed with this, outlining that stability remained during the period 2012 to 2013 for its big accounts, which saw a slight increase in price of Û5-10/tonne ($6-13/tonne), while for its smaller accounts, a potential increase of Û15-20/tonne is possible if demand continues to recover. The company produces light, dense, dense coarse and light pharma-grade soda ash for distribution in France, Germany, Benelux and Switzerland.

Prices for natural soda ash are expected to continue to hold an advantage over synthetic soda ash, according to FMC Corp., although synthetic producers are expected to work to close this gap.

Solvay, a worldwide supplier of both natural (US-produced) and synthetic (Europe-produced) soda ash, told IM that it “will continue to reinforce the competitiveness of its synthetic-based soda ash plants to supply Europe demand and the global trade market”.

IM’s list prices for soda ash, as of 19 April, can be seen in table 2 below.


Looking ahead, soda ash producers are anticipating an increase in natural soda ash production as demand continues to increase, as well as an increase in the competitiveness of synthetic product.

“Trona-based production capacity in the world, the most competitive way to obtain soda ash, will increase and represent about a third of total demand. Further growth is not forecasted. Synthetic production is, therefore, necessary to supply the market,” Solvay told IM.

“Solvay has highly-productive operations in Europe, that can compete effectively in the market place. Productivity plans are being developed to further improve competitiveness. Market outlook shows opportunities for large-scale competitive operations,” the company added.

However, while the market is expected to rise to pre-crisis levels, soda ash producers are not without their restrictions.

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 mineral’s 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, transportation makes up approximately 20% of the mineral’s 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.

Despite these challenges, producers remain optimistic.

“Increasing urbanisation and the emphasis on sustainability, in its broadest aspect across consumer and producer sectors, will be key factors that would drive future growth,” Tata Chemicals said.

“The market for soda ash, both in the medium-and long-term, continues to remain healthy and optimistic for both producers and consumers of this vital essential product,” the company added.

* Calculated April 2013

Sodium bicarbonate

Sodium bicarbonate is used as a household consumer product and is manufactured by percolating CO2 gas through a carbonation tower containing a soda ash solution.

Sodium bicarbonate is a chemical compound with the formula NaHCO3 and is a white solid that is crystalline but often appears as a fine powder. Approximately 0.68 tonnes soda ash is needed to make one tonne sodium bicarbonate.

Leading producers of sodium bicarbonate include FMC Corp., Solvay, Tata Chemicals, Energi Group, Novacarb and Penrice Soda. This list is not exhaustive, however.

The market for sodium bicarbonate was only mildly affected by the economic downturn as its end-use markets remained stable. Demand is expected to continue to grow as new applications are found.

Solvay, a leading position in sodium bicarbonate in Europe and North America, agreed.

“Solvay’s marketing and manufacturing actions will continue to grow in this market in Europe and in the rest of the world, through the growth of existing markets in line with mega trends (de-pollution, health and so forth) and the development of new applications,” it told IM.

The sodium bicarbonate market is growing at a rate of around 5-6% each year thanks to growing demand from the animal feed, food, flue gas treatment and pharmacy markets, according to Novacarb.

Pakistan Customs Regulation

In Pakistan, the directorate general of Customs Valuation in Karachi has revised the customs value on imports of soda ash. Soda ash will now be assessed for import duties with the customs value of $265/tonne for synthetic dense soda ash, $255/tonne for synthetic light soda ash and $250/tonne for natural dense light soda ash.

The updated valuation ruling was necessary in order to reflect the upwards price trend of soda ash in the international markets, the directorate said. Following meetings between the customs valuation department and soda ash stakeholders, it was agreed that the customs’ value for soda ash needed to be revised as the international price of the mineral had increased since import duties were set three months ago.

The valuation ruling added that if the price trend of soda ash changed direction during the 90-day period following the date of the ruling, stakeholders could seek a further revision, subject to sufficient documentary evidence.

The India Finance Ministry in June last year 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, depending on the manufacturer and country of export.

The Indian government first said in September 2011 that it was planning to impose anti-dumping duties on soda ash, but set levels at a range of $11.55-$38.38/tonne. In that same year, the Detergent Manufacturers Association of India lobbied to keep dumping duty low.