Japan: soda ash demand in decline

The Japanese soda ash market is heading for supply rigidity as domestic producers struggle with low profitability resulting from rising fuel prices, high maintenance costs for outdated facilities and …

The Japanese soda ash market is heading for supply rigidity as domestic producers struggle with low profitability resulting from rising fuel prices, high maintenance costs for outdated facilities and investment costs for renovation, it was reported on 5 July 2007. Global demand for soda ash is growing for applications including glass and detergents. The USA, Japan“s main source of imports, produces 10 million tonnes per year of natural soda ash and exports about half of this amount; while its domestic requirement remains flat, demand in Latin America is increasing. Chinese exports to Japan have gone up, but China“s own domestic requirements are on the rise and procurement costs are increasing. Two Japanese producers recently informed customers of price rises, the first time in two years. Central Glass announced rises in April 2007, followed by Tokuyama Corp in June. The move to pass on cost increases to users might, however, lead to plant closures and production cutbacks downstream. Japanese demand for soda ash fell to 810,000 tons in 2006, a downward trend in course for three years running, according to the Japan Soda Industry Association. This is attributed to lower demand for glass production due to the widespread use of PET bottles and a shift to liquid crystal displays and plasma display panels instead of cathode-ray tubes for televisions and computers. The downward trend is making it difficult for Japanese producers to pass on escalating costs to customers.