Soda Ash Prices Rise As Demand Rises With Economic Recovery



Among the multitude of commodities that have gained this year after the economic recovery, sodium carbonate – also known as sodium carbonate – is one of which has prices increased by more than 70% since the start of the year. ‘year.

Sodium carbonate, which is widely marketed locally in Europe and Asia, increased from 972.5 yuan (11,150 yen) per tonne this year to 2,312 yuan (26,475 yen), according to the Trading Economics website. . This is based on contract-for-difference (CFD) trading that tracks the benchmark market for that commodity.

The economic recovery around the world has increased demand for sodium carbonate, which is used, among other things, in the production of glass which accounts for 50 percent of global consumption, causing prices to skyrocket.

Sodium carbonate is widely used in glass making because it helps regulate the temperature of the furnace to achieve stability. In addition, it is used in soaps, detergents, chemicals, metallurgy, pulp and paper.

“A constant rise in prices”

U.S. company Ciner Resources, the world’s largest producer of natural soda ash from Trona ore in Wyoming, said in presenting its second quarter results that “selling prices (sodium carbonate ) worldwide are steadily increasing due to a tightening market and higher costs “.

During the second quarter, Ciner said it saw the economic recovery continue after the Covid-19 pandemic, leading to increased production of soda ash. In its annual report for 2020-2021, Tata Chemicals said demand for soda ash, after being hit during the Covid-19 pandemic, recovered late last year and the recovery is picking up. continues sequentially in all areas of application.

Tata Chemicals, a subsidiary of the Tata Group, is one of the largest producers of soda ash in the world, with the exception of Nirma Ltd. Rising soda ash prices helped the company’s shares rebound 200% last year. Since the start of this year, stocks have gained 85 percent.

Flat glass recovery

Economic recovery leading to increased uses of soda ash was confirmed by Belgium-based global chemicals company Solvay SA Commenting on second quarter results of this year, it said soda ash sales increased by 8% thanks to the continued recovery of flat glass.

Market research firm IMARC Group said: “The economic recovery could lead to an increase in demand for sodium carbonate (soda ash) which is used, among other things, in the production of glass.

The increased use of glass packaging solutions in the food and beverage, pharmaceutical and personal care industries is also boosting market growth in this segment, he said, adding that the market would experience a compound annual growth rate of 4% in 2021-2026. . The market value of sodium carbonate was set at $ 17.8 billion last year with an estimated annual production of 55 million tonnes (mt).

Chinese-led takeover

Ahmedabad-based Nirma Limited, a well-known player in the detergents market and another large producer of soda ash, said in its annual statement that the demand for soda ash is expected to increase in the next few years due to increased consumption. healthy glass segment. .

This year’s recovery follows a 5.4% drop in global demand last year, equivalent to 3.3 million tonnes, Tata Chemicals said. The company said trade has declined from 16.6t to 15t due to Covid affecting demand and supply chains.

The price recovery was led by Chinese growth, although it was delayed in other parts of the world, where companies attempted to reduce inventories.

Other pressures

Tata Chemicals said demand in India was also affected in the first months of the lockdown due to lower consumption by the glass and chemicals industries. The detergents sector, another major consumer, however resisted.

“The market was also under pressure due to high pipeline inventories and imports which caused an imbalance between supply and demand. Imports have also exerted pressure on domestic prices for much of the past year, â€said the Tata group subsidiary.

Regarding the recovery, Ciner said he saw the strengthening in demand continue, but the increase in cases of the Delta variant coronavirus posed a risk. He said exports were affected by high ocean freight rates and low availability of vessels, affecting the profitability of exporters. However, the company said it was optimistic about the continued recovery in selling prices.

Growth prospects

Analyst firms said demand for soda ash was being driven by growing construction in emerging economies, particularly in the Asia-Pacific region. The chemical is also used for air purification and water softening as environmental concerns increase. China and India are the main consumers of sodium carbonate, with construction, glass, paper, textiles and cleaning chemicals being the main consumers.

In water, sodium carbonate can control the pH value and this is the main reason for its intensive use in the water treatment industry. The growth in the use of liquid soaps and detergents is also driving an increase in the demand for sodium carbonate, which some analysts believe could lead to a 4% CAGR growth through 2030.


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