In 2010, demand for soda ash in the developing regions of the world is strong; this growth will likely take the world total back to pre-crisis levels. However, in many developed markets it may take lo…
In 2010, demand for soda ash in the developing regions of the world is strong; this growth will likely take the world total back to pre-crisis levels. However, in many developed markets it may take longer to recover the demand lost in 2009, if ever. The major issue today for soda ash producers is overcapacity. This overcapacity is in some respects region specific. In Europe and China capacity is considerably in excess of demand. In the US producers are running at high rates as they use their low cost position to maximize their exports. The US is the largest soda ash exporter in the world. Over the last decade, Chinese producers have taken market share from the US in export markets, even in 2009. However, the loss in market share in 2009 was really due to a lack of flexibility by the US industry and a delayed reaction to changed market dynamics. In 2010, we have seen the reverse situation as the US industry is very aggressive in export markets. The soda ash industry is in an evolutionary phase. Part of the current changes are a legacy of the difficult environment the industry faced a decade ago, and part is a reflection of the changing global economic environment. The rapidly developing economies of China, India, and Russia in particular are prompting changes across the world, and pose both opportunities and challenges for this industry. The difficult global economic environment faced by the industry in 2009, and to date in 2010, has already influenced some changes and will, no doubt, precipitate even further changes over the years ahead. World demand is forecast to grow by about 4.6% per year through 2015, with Chinese production expected to increase at an average annual rate of almost 5% through 2015. Most of this increase in supply will be to meet domestic requirements. US production is forecast to increase through 2015 to meet both domestic and export demand. There is significant idled capacity in the US. Some of this capacity is likely to be restarted over the coming five years as the US industry continues to exploit its low cost position. Capacity closures in the high cost regions including Europe are very likely.