China: soda ash prices soar on recovering demand

Soda ash prices in China have reportedly been undergoing an upward trend in the past several months thanks to both recovering demand as well as rising production costs.
Current soda ash prices are qu…

Soda ash prices in China have reportedly been undergoing an upward trend in the past several months thanks to both recovering demand as well as rising production costs. Current soda ash prices are quoted at 1,500 to 1,575 CNY/metric ton (tonne), an increase of almost 300 CNY/tonne from three months ago, with prices expected to increase even more during the first six months of 2010, even if with limited rising range. Soda ash is used mainly in the production of flat glass and its operating rate directly affects soda prices. China has about 190 float glass production lines, with 160-170 lines presently in operation. China“s soda exports reached 2.32 million tonnes in 2009 – 12% of output, while the industry“s total capacity is currently 25 million tonnes, and is expected to expand during 2010 with new projects underway. US industry associations such as The United Steelworkers have requested their government to increase tariffs on glass imported from China to protect their glass manufacturing industry. According to analysts, the Chinese soda industry will suffer a heavy blow if higher tariffs are imposed on Chinese glass by the US. However, soda prices are not expected to drop in the short term, because of low stocks. Furthermore, there will also be a drop in operating rate due to the usual overhaul of soda plants in February, June and July.