Soda Ash: First world analysis

Chemical Market Associates, Inc. (CMAI), a chemical consulting firm that services a wide range of companies all over the world, recently completed the first World Soda Ash Analysis. This annual analys…

Chemical Market Associates, Inc. (CMAI), a chemical consulting firm that services a wide range of companies all over the world, recently completed the first World Soda Ash Analysis. This annual analysis is the most complete study available covering soda ash production, trade, economics and forecasts for the global soda ash industry. In addition, an analysis of the world glass industry is also provided, including discussions on glass recycling and penetration by PET. The global soda ash industry has been in a downward profit spiral for the past few years as a result of new capacity in China, over building of capacity in the US, and the increasing price of energy. Global demand for soda ash has grown at rates below GDP growth and is forecast to increase at around 2.3% per year over the next few years. According to Marguerite Morrin, Consultant, Chlor-Alkali/Vinyls – London, a combination of strong recovery in world GDP commencing next year and global GDP growth of nearly 4% through 2004-2006 will significantly improve the prospects for a more profitable soda ash industry. The developed countries of the world account for over 40% of demand for which growth is expected to stagnate as these are now mature markets. The real growth in soda ash demand over the next few years will be in Asia, which consumes around 36% of the total world demand. In fact, it is anticipated that demand in China will grow by almost 1 million tons over the next five years. CMAI forecasts that the industry will return to profitability through 2003. However, this will lead to more capacity addition in the outer years of the forecast.