The majority of contract negotiations for soda ash prices in
2019 will be soon be under way, with producers believing that
higher costs will push prices upward while they strive to
preserve their profit margins.
The European market for soda ash has been tight so far this
"Everyone is sold out and our customers are rushing to
secure supplies for 2019," one European producer told
Industrial Minerals on Monday July 30.
Some contracts that would typically be finalized around
September had already been settled at prices $20-30 per tonne
higher than in the previous year, he added.
"Our position for 2019 is that prices will go up
substantially," a second Europe-based producer said. "Clearly,
the market is tight."
The price for soda ash, European
synthetic, dense and light, large contracts, ex-works, was
assessed by Industrial Minerals on July 26 at €190-210
($221-245) per tonne.
The second producer said that while it had not received any
formal approaches for contract negotiations, it had heard
"through the market" that consumers will be looking to start
the annual discussions slightly earlier this year with the
intention of avoiding a steep increase in the price.
"Customers wanting to settle contracts early is a sign that
they are worried about cost increases," the second producer
Stronger coking coal and energy prices, along with higher
rates in the EU’s Emissions Trading Scheme (ETS),
have squeezed profit margins for the region’s soda
The ETS provides a way for companies that operate in the EU
to "buy" or "sell" the amount of greenhouse gas pollutants they
may emit, if they are over or under their permitted volume.
The price for an ETS allowance trebled to €15 per tonne
from €5 per tonne between May 2017 and April this
Outside Europe, the Chinese soda ash market is now reported
to be in oversupply, with two China-based sellers saying
that producers now hold 600,000 tonnes of stock.
The oversupply, coupled with weak demand, pushed down the
price for soda ash
synthetic, dense and light, fob China, to $260-270 per
tonne on July 26.
The latest assessment by Industrial Minerals was flat from
the previous week but down from $300-310 per tonne on July
Consumers are now buying enough material to maintain
production levels and are not holding any stock themselves, in
the belief that prices will continue to fall.
An Indian soda ash producer said that, at current prices,
"we are not threatened" by the possibility of Chinese material
flooding the Indian market.
But it added that, if the delivered price drops to $265 per
tonne, including freight, that could become a problem because
Chinese product could then be financially viable for Indian
Freight costs from China to India add $20-30 per tonne to
the assessed fob China price.
The current price for soda ash in India was assessed steady
on July 26 at $275-285 per tonne for soda ash, Indian
synthetic, dense and light, domestic, ex-works.