Soda ash: Prices in upward trend as producers rush to open new capacity in tight market

A number of global soda ash producers have announced plans to increase capacity in order to meet rising demand. Ciner Group of Turkey plans to increase its US capacity based on trona (trisodium hydrogendicarbonate dihydrate) by 4Mtpy. This would include expanding its Ciner Resources operation from 2.94Mtpy to 3.94Mtpy by 2022 and adding a new greenfield 3Mtpy facility by 2024. Solvay plans to increase its soda ash production by 500ktpy and its sodium bicarbonate production by 100ktpy by 2021 after debottlenecking production facilities in the USA (based on trona) as well as in Italy, Bulgaria and Spain (based on synthetic soda).

Indian capacity is also rising. GHCL is increasing its total capacity to 1.2Mtpy by 2021 with a 125ktpy capacity expansion due for completion this year. This could be followed by two further 50ktpy expansions. Tata Chemicals is also planning a 150ktpy expansion to its soda ash capacity in the near future.

Roskill view:

A large proportion of this new capacity is planned to be opened in the US where producers are enjoying highly competitive production costs but where capacity has been somewhat constrained. Chinese producers who traditionally export to global markets are facing increasing competition from this increase, as much of the new US capacity is focussed on the export market rather than the weaker domestic market.

Demand for soda ash is growing strongly and prices, for now at least, are rising with the tightening market. The largest markets for soda ash are glass (including that used in construction and consumer products), detergents and a wide range of chemical and industrial products. Asia will continue to lead global demand growth over the next decade.

To discuss the soda ash market with Roskill, contact David McNeill david@roskill.com