Soda ash demand fell during the Covid crisis – but there are signs it is slowly beginning to bounce back.
World demand of the crucial glass manufacturing raw material is expected to fall by about 3.8 million tonnes this year - a decrease of approximately 6%, which includes a decline in demand from the glass sector of 3.1 million tonnes, or 9%. But prices have recently started to rise, an indication demand is beginning to return and a reflection of the fact Chinese producers were operating at a loss.
The majority of soda ash producers lowered their production as a result of the drop in demand during the height of the pandemic. US soda ash manufacturer, Genesis, said in March it was to idle 500kt of production at its Grainger facility in Wyoming, USA. It initially said this capacity would be restarted in September but now indicates the plant will remain idled in 2021.
Glass manufacturing is hugely important to soda ash production.
About 50% of all soda ash is consumed by the glass industry. Excluding China, the container glass sector consumes 24% of all soda ash, flat glass 23% and other glass 5%. China is the world’s largest flat glass manufacturer so if China is taken into account, these statistics vary to 18% of total soda ash demand from container glass, 29% from flat and 5% from other glass.
Pre-Covid, the soda ash market had
been buoyant with a number of capacity
expansions announced, including the
3.6 million tonnes Inner Mongolia Berun
Group project, Inner Mongolia, set to
open in 2022, as well as more expansions at the Green River basin in Wyoming.
The Green River Basin is the largest and
one of the highest purity known deposits
of trona ore in the world.
The spot price out of China of the material had risen to $250 per tonne Free on Board (FOB) at the beginning of 2019.
But due to over supply in the market - mainly due to Chinese overproduction - this had gradually decreased first to about $211 FOB at the start of 2020 and then $166 FOB in July.
Chinese production has recently slowed as a result of several plant maintenances and prices have started to increase again.
While the soda ash industry survived the crisis thanks to its continued supply to markets such as lithium, and the soaps and detergents sector it should soon be in a position to thrive again thanks to glass and the increased focus on environmentally friendly solutions.
In the flat sector solar glass production is expected to increase while container glass is viewed as an environmentally friendly and recyclable packaging material. These products, which depend on soda ash, will have opportunities to thrive in the future.
An overview of the global soda ash
market will be provided by Marguerite
Morrin, Executive Director Global Soda
Ash Services at IHS Markit, during the
forthcoming World Soda Ash Conference
online.
Beyond Covid-19: Surviving to
Thriving, takes place between October 19
– 22 and will include 20 presentations as
well as two training workshops.
Speakers from the glass industry include Mukul Somany, Vice Chairman & Managing Director of Hindusthan National Glass & Industries who will discuss the Glass Outlook for India.
FEVE’s Stefano Cassano, Chairman of its Circular Economy Group, will provide a presentation focused on Developments in Glass Recycling and Container Glass, while Xiaofei Chen, Director, Flat Glass Futures, China Construction Glass and Industrial Glass Association will talk about the Flat Glass Outlook for China.
Glass for Europe’s Public Affairs Manager, Cedric Jenssens will provide a paper highlighting Flat Glass in Climate- Neutral Europe.
Other papers will include an update on the Chinese soda ash industry from the Chinese soda ash industry association, a producer view of the Indian soda ash and detergent industry from Rohit Surfactants and an update on packaging materials and their environmental costs from IHS Markit.
*Executive Director, Global Soda Ash Services, IHS Markit, London, UK
