China: salt supply threat as demand booms

The rapid growth in Chinese demand for sodium chloride used in glass and commodity-grade resin is soon expected to cause a crisis in supply capacity.
According to an estimate by a major trading house…

The rapid growth in Chinese demand for sodium chloride used in glass and commodity-grade resin is soon expected to cause a crisis in supply capacity. According to an estimate by a major trading house, the combined supply capacity of major salt producers such as Mexico, Australia and India for the Asian market exceeded aggregate demand by 1.83 million tons in 2004. But this excess is projected to fall to 790,000 tons in 2005, and is expected to disappear altogether in 2006. Boosting supplies in the short term is difficult because developing a salt deposit takes at least five to six years, according to the source. China produces slightly more than 30 million tons of salt a year, but a growing portion is being consumed by runaway domestic demand, cutting exports in half to 500,000 tons in 2004 from 2003. Shipments are expected to be halved again in 2005. Meanwhile, imports by China are booming, up from 170,000 tons in 2002 to 370,000 tons in 2003. The figure rose to 1.5 million tons in the 11 months through November 2004, turning the country from an exporter to an importer of salt. Imports in 2005 are certain to exceed 2 million tons, according to a source at the trading company. China has an abundance of rock salt in its inland regions, but supplies to coastal cities, where most users are located, are hindered by high transport costs.