|A worker at Ciner Group’s Eti Soda plant
prepares soda ash for shipping.
Eti Soda/Ciner Group
The soda ash market showing tightness due to strong growth
in end markets. Global demand is growing between 1-3% annually
and as much 10-12% per year in the India market, while there is
decreasing amounts of Chinese soda ash available for
If market tightness continues, without any relief in the form
of additional capacity, this will raise concerns in the
China takes on new supply
"We have seen a lot of tightness, American Natural Soda Ash
Corporation [ANSAC] continues to be sold out. We are getting
requests from every region for more product," Rob Fennell,
global market and business development manager at US export
body ANSAC told Industrial Minerals.
ANSAC operates as the international marketing arm for Ciner
Resources, Tata Chemicals and Genesis Alkali, which between
Solvay and Searles Valley Minerals - which also produce soda
ash in the US, but both handle its own marketing - produced
11.8 million tonnes of soda ash in 2016, of which 6.78 million
tonnes was exported from the United States.
Even with Ciner Group’s fifth line of
production at its new plant in Kazan, Turkey, coming fully
online this year, the market is still expected to remain tight
through 2019-20, Fennell told Industrial Minerals.
The soda ash market has consumed the additional capacity
from Kazan without any significant impact on price, despite
strong expectations that prices would decrease as the new
supply came online.
This was due to an unexpected 4% increase in demand from the
Chinese market in 2017. Accounting for around 40-45% of global
demand and comfortably outstripping the 2% growth in the global
market, the increased demand from China cushioned the impact of
the slightly staggered rise in supply.
Ciner remained firm that the new supply
wouldn’t send soda ash prices tumbling, and the
company turned out to be correct.
|Soda ash, synthetic, dense and light, FOB
Industrial Minerals’ soda ash prices
were $220-250 for soda ash, synthetic,
dense and light, fob, China until December 14, 2017,
and have now recovered
to $270-280 as assessed on April 26.
Source: Industrial Minerals
Glass is - and will remain - the largest end market for soda
ash in Europe, accounting for more than 50% of demand.
One soda ash producer who spoke to Industrial Minerals
pointed to flat glass as a continued growth market.
This was contradicted by a Europe-based producer, who said;
"the construction sector is showing signs of slowing, which
could correspond with a slowdown in demand if that trend
continues, while new car registrations have started to come off
"We won’t see a change in the container glass
demand, only in the flat glass sectors," the second producer
Flat glass is used in window panes and car windshields,
while the construction sectors also require soda ash for glass
wool insulation, although demand for the latter is relatively
minimal by comparison.
The European container glass industry grew at 5.8% by volume
through 2012-2016, according to the European Container Glass
Glass containers have become increasingly popular as plastic
packaging and single-use plastics have been seen in an
increasingly negative light by consumers.
|Tata Chemicals owns the Magadi operation in Kenya,
produces soda ash from natural trona. The facility
mothballed in 2014 but brought back online in 2015.
There is also the potential for recycling to influence
demand for raw materials, but since many European countries
already have well-developed recycling systems that have been in
place for many years market participants believe that any
impact on demand for raw materials has already been absorbed by
Recycling in container glass reached 74% of total production
in 2016, or 11.6 million tonnes of collected glass, as measured
This was believed to have saved 12.5 million tonnes of raw
materials in 2014, and with 200 kilograms of soda ash required
for every tonne of glass that should have removed demand for
2.5 million tonnes of soda ash just in Europe.
By comparison, the recycling rate for flat glass is between
6-8%, according to Stephane Noel, environmental advisor of
industry trade association Glass for Europe.
"The estimation is that recycling is having a 15% saving on
raw material, possibly a little higher," he added.
The significantly lower level of recycling in flat glass
opposed to container glass is partially because the quality of
flat glass needs to be higher but also retrieving cullet (scrap
glass) from demolished buildings requires specialist procedures
Adding one tonne of cullet to a glass furnace can save 1.2
tonnes of raw materials, and save manufacturers around 2-3% on
energy costs as the cullet acts as a flux agent, according to
figures from Glass for Europe.
The closed economy has more or less reached its equilibrium
and should there be any significant uptake in recycling, it is
likely to be incremental, and therefore unlikely to
significantly impact the demand for soda ash.
Double glazing demand itself is strong too, growing at 5%
from 2016-17 so increased recycling and sector growth would
counterbalance each other if looking purely at demand for raw
The situation, then, is that there is good demand in the
sectors which traditionally require the raw material, with no
additional supply coming onto the market.
This market status prompted a third producer supplying the
European consumers with soda ash to assess the market as now
going into undersupply, with them forecasting a $10/tonne
increase on soda ash prices in the second half of 2018 and a
$10/tonne increase in the first six months of 2019.
"The float and plate glass industry is short; the market is
very good in Europe and everybody is looking for glass and
therefore it is forcing soda ash demand [higher]," the third
|Solvay produce natural soda ash at Green River,
The world’s largest natural producer, Ciner
Group, which annually produces around 6.5 million tonnes of
soda ash across the production sites in Turkey and US, has
earmarked around 300,000 tonnes of additional tonnage to be
brought to the market once the Kazan plant has been ramped
This capacity will be tapped through debottlenecking
activities and optimisation of the machinery and plants at the
facilities in Wyoming, US, however this will be staggered over
the next three years.
Genesis Alkali could also expand its Granger plant by up to
700,000 tonnes. Although this would need some investment,
according to ANSAC’s Fennell.
He was unable to comment on how large that investment would
be or how quickly the product could reach the market.
European producers are more modest about any similar
exercises. A Europe-based producer speculated that there,
"fundamentally would be scope for debottlenecking and
potentially the big producers could find an additional
Drawing this back to the global market, if we take the upper
valuations of the potential capacity that come to market after
the Kazan ramp up, then its potentially 1 million tonnes. The
global market is growing at 2% on average and therefore
requires 1.2 million tonnes per year in additional
This puts the focus on the Chinese market as the only
variable in terms of bringing back significant capacity to the
market, or bringing online new capacity.
Soda ash exports from China stood at 1.52 million tonnes
over 2017, which is down 23% from 1.97 million tonnes over
2016, according to China Customs data.
2016’s total was also down against the previous
year, by 10% from 2.19 million tonnes exported during 2015.
This trend compounds issues in the global supply mix when
coupled with the 4% growth in soda ash demand the Chinese
market experienced over 2017, which could leave the soda ash
market short in the coming years, unless significant capacity
can hit the market in a fairly short time frame.
|Searles Valley Minerals produces soda ash from the
extracted at Searles Lake, California. It ships a million
a year of soda ash internationally.
Searles Valley Minerals
Soda ash demand from the lithium market
Lithium producers use soda ash to produce lithium carbonate,
requiring 1.5-2 metric tonnes of soda ash for every 1 tonne of
lithium carbonate made.
Growth in the lithium market, due to higher demand for
lithium-ion batteries, is well documented. Global lithium
carbonate equivalent production is estimated at 272,000 tonnes
in 2018 while conservative estimates by Metal Bulletin Research
show that demand will reach about 312,000 tonnes per year by
So will this be a boon for soda ash
Industrial Minerals understands demand for soda ash from
lithium carbonate markets is anticipated to grow at 10-20% over
the next few years. This does not, however, include production
from lithium projects in Bolivia which reportedly has the
largest reserves in the world, estimated at 9 billion
In 2018, lithium carbonate production will account about 1%
of global soda ash demand in 2018, according to
Increased demand from higher lithium carbonate production is
likely to be counter-balanced by a decline in other end markets
"We are seeing detergents drop off a bit, and this
effectively counters the growth in demand from lithium
carbonate. They are cancelling each other out in terms of
influencing overall demand in the market," Fennell said.
Flat glass recycling in the Netherlands
Vlakglass Recycling Nederland (VRN) in the Netherlands
operates as a not-for-profit and receives funding from Dutch
domestic glass producers, along with some European producers
with exposure to the Dutch flat glass market, in order to
collect flat glass from demolished buildings.
VRN piloted its scheme in 2002 in the north of the
Netherlands, and then subsequently proceeded to roll it out
across the country.
Receiving €0.4 per square meter of double glazing "put
into the Dutch market," VRN collects 72,000 tonnes of the total
105,000 tonnes of cullet in the Netherlands every year.
Part of the remainder is collected by other companies, and
15,000 tonnes goes to landfill.
Part of the organization’s mandate was to
preserve the raw materials for glass, although it is unclear
how significantly this impacts demand.
"We collect 70,000 tonnes and the yearly output of bottle
glass is the Netherlands is 300,000 tonnes, so I think the
impact [on soda ash] is fairly low," Cor Wittekoek, director of
VRN, told Industrial Minerals.
Although the Netherlands doesn’t actually
produce any float or flat glass, only double glazing, the aim
of VRN is to have 20% of cullet going into flat glass
furnaces and float glass lines with raw materials.