European glassmakers have expressed their opposition to proposed increases in soda ash prices now due to be implemented. Soda ash producers say the increases are relatively small, lower than the 1996 …
European glassmakers have expressed their opposition to proposed increases in soda ash prices now due to be implemented. Soda ash producers say the increases are relatively small, lower than the 1996 increase of 4-5%. The price increases at the beginning of 1996 were the first in three years in the Western European soda ash market. Producers are arguing that further increases are justified because prices are still well below those of the early 1990s. However, glassmakers claim they will be faced with price rises of more than 5% at a time when they are having to deal with falling prices for glass products, particularly flat glass. “We are getting applications for price increases ranging from 5-10%, depending on the country and the level of the price for this year,” said a raw materials buyer at one glass company. “These price rises must be strongly resisted.” Despite soda ash companies insistence on the need for increases, glassmakers feel their plight is even more serious. “The glass sector is in a similar if not worse position because flat glass prices are half what they were in the early 1990s,” stated John Andrews, group purchasing manager at the UK firm Pilkington. “The reality at the moment is that prices have been going down in many markets. Our dilemma is that we are being faced with higher raw material prices when we are trying to reduce costs. Soda ash already accounts for around 20% of our total manufacturing costs.” The glassmaking industry believes, however, that the pressure from soda ash producers for price increases supports arguments they are currently presenting to the European Commission in favour of lifting anti-dumping duties on US soda ash imports. The Commission is reviewing the duties, which were imposed in 1995 after an official investigation backed allegations by Western European soda ash producers that US exporters had been dumping soda ash over three years ago. The duties ranged from 2.5% on exports of General Chemical to 8.9% on those of FMC Wyoming Corporation. “The demands for higher prices strengthens the views we have put to the Commission that the market position of the soda ash producers has improved to such an extent that they are able to call for price increases,” says Gilbert Maeyaert, general secretary of the Western European glassmakers association (CPIV) in Brussels, Belgium. “The soda ash producers are not so badly off as they claim. Price rises will increase their profitability, while the glass makers will have difficulties absorbing the rises because of the low prices of their own products.” US soda ash exporters, like FMC, are also thought to be urging the Commission to lift the anti-dumping duties. FMC currently exports soda ash to Spain as a raw material for its subsidiary FMC Foret, Barcelona, a producer of silicates and sodium sulphate.