Industrial Minerals / Soda Ash: Market outlook to 2015, 11th edition 2010

Demand for glass and detergents in emerging markets surged between 2000 and 2008 and soda ash consumption rose by 4.2%py to a peak of 48.1Mt.  However, the global economic downturn caused demand for these products to fall sharply in 2009 and soda ash consumption fell by almost 8% year-on-year.  While North America and Europe were the worst affected regions, consumption in emerging markets, excluding China, also fell. The most significant gains in production from 2000 to 2009 came from China, where output more than doubled to 18.7Mt, 42% of worldwide production in 2009.  Low costs and access to freight assisted China in becoming a key exporter, taking market share in Southeast Asia and South America from the previously dominant natural soda ash producers in the USA.

The mid-2000s also saw a period of industry consolidation, notably with Indian producers acquiring assets in North America, Europe and Africa.  China accounted for almost 90% of new or expanded capacity from 2000 to 2008, but new plants were also commissioned in Argentina, Turkey and Uzbekistan.

Soda ash production is an energy intensive process and rising costs were a major contributing factor to a sharp increase in prices in 2007 and 2008.  Energy surcharges and formula-based contracts have become increasingly common in soda ash purchasing.

Demand for soda ash is slowly returning to pre-recession levels in mature markets.  Emerging market demand, particularly for flat glass and detergents, will continue to be the growth driver, but rates are forecast to be lower in the period to 2015 (3%py) than witnessed in the mid-2000s.  Chinese capacity continues to expand at a rapid pace, but rationalisation of older and less efficient plant could occur.  Elsewhere, exports of natural soda ash from Turkey are putting increasing pressure on producers in neighbouring regions, notably those in Europe.  Energy costs are unlikely to fall further meaning prices could bottom-out in 2010 and increase steadily going forward.

Get accurate answers from independent experts

• When will soda ash demand recover to pre-recession levels?
• How might new capacity in Turkey affect producers in Europe?
• Will the USA outperform China in their growing export markets?
• Does increased glass recycling pose a significant risk to soda ash consumption?
• Who has benefited from the recent round of industry consolidation?
  
• What next for China and can its output growth be maintained?