Soda Ash Producers Holding Ground and Awaiting Market Improvements

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Demand for Soda Ash (Sodium Carbonate) last year declined once again, marking another year of negative numbers for both growth and pricing. Several North American producers idled capacity last year, recognizing new capacity using low cost solution mining technology that came online in 1999 and 2000.

"Soda ash production declined once again as a result of poor performance in downstream markets tied to consumer spending trends for such things as glass products, soaps, and detergents," commented Trey Hamblet, Chemical Group Manager with Industrialinfo.com. "Domestic producers are only planning a handful of capital projects during the next 12-18 months and maintenance dollars are even being trimmed back to the 'must do' projects."

The plant closures and idled capacities that took place last year, combined with only a small amount of new capacity, should help the market reach a point of balance despite a demand curve that is projected by many industry experts to continue its decline as consumers migrate to plastic substitutes over traditional glass products.

This industry segment is shadowed not just by idled capacity that could dramatically worsen or change the market's direction if restarted, but several producers have been seeking buyers for their businesses for several years with no success. Recovery for soda ash producers is not expected to improve much until downstream markets such as chemicals and pulp and paper show some very strong signs of recovery and aid in increasing demand.