For the Quarter Ending September 2021
After the occurrence of the climate calamities in the US Gulf region, the prices of Soda Ash witnessed a steep rise in the domestic market backed by high demand in Q3 2021. US-based Ciner Resources, the world’s largest natural soda ash producer from Trona ore, Wyoming observed that its Q2 sales were increased on the back of the healthy economic recovery in the USA. The market experienced balanced supply and demand fundamentals throughout the 3rd quarter, however many market participants reported that the Soda Ash market has re-shifted balance due to the growing demand and increasing cost of raw materials. The ex-works prices observed a consistent surge and settled at USD 190/MT in September.
During the third quarter of 2021, the Soda Ash market in the Asia Pacific region experienced an upward trajectory backed by the cost support of the upstream feedstock Caustic Soda. The prices of raw materials in the Chinese domestic market constantly observed an uptrend due to the high freight costs and shortages of containers which further impacted the supply of Soda ash in China. The demand for Soda Ash is highly driven by rising construction activities in the Asia-Pacific region. In India, EXW prices of Soda Ash grew significantly from USD 255/MT to USD 293/MT within the quarter. The demand rose at an exponential pace in China and India from the downstream industries including construction, glass, paper, textiles, etc. in Q3 2021.
In Europe, the prices of Soda Ash observed an uptrend followed by the exorbitant cost of raw material and disrupted logistics. Sudden increment in the prices of energy affected the overall production cost of Soda Ash in the region during Q3. Moreover, the mixed price trend of raw materials led to very thin margin for regional manufacturers. Demand remained firm from the downstream glass and detergent industry in Q3 2021. Inflationary pressure due to the global pandemic further affected the overall price trend of Soda Ash. The price of Soda Ash (Light) in Germany was assessed at USD 266/MT FOB Stassfurt in September 2021.
For the Quarter Ending June 2021
After the setback from the polar winter storm in the US Gulf region which knocked out three fourth of the chlor-alkali production, majority of operations have been restored as 70% of the key feedstock Caustic Soda facilities have resumed manufacturing in the first half of the quarter. However, the supply-demand imbalance was witnessed in the later half. It was observed that the US chlor-alkali capacity fell by 6% on m-o-m basis in May, amidst the operational issues due to equipment failure at Formosa facility in Westlake Texas in early June. As a ripple effect ANSAC hiked the prices of the exported Soda Ash by USD 25 per tonne in June.
In China, Soda Ash market outlook strengthened amidst the cost support of the key feedstock Caustic Soda. Feedstock prices in the Chinese domestic market constantly observed an uptrend due to the rising cost pressure on raw material in China. As a ripple effect, prices observed a consistent surge with FOB Shanghai discussions settling at USD 261 per tonne. The supply outlook in China remained influenced by the joint impact of curtailed synthetic Soda Ash production, and higher shipping freight charges. However, export to India declined in April and May period due to a decline in demand from Covid second wave.
According to the major European producer in Belgium “demand recovered across the region after the ease in restrictions imposed amidst the second COVID wave in Europe.” Demand outlook revived effectively compared to the previous quarter as the mass vaccination drive amplified the market movement, leading to better commercial and industrial activities. Whereas the pricing trend remained buoyed in the European region with a combined impact of higher freight charges and rising lobal inflation.
For the Quarter Ending March 2021
The North American Soda Ash market remained tight during the Q1 2021, as the USA Gulf regional plants were compelled to shut down due to the power outages caused by the sub-zero temperature during mid-February. Furthermore, arbitrage and export agreement between TATA Chemicals and ANSAC ended in early January putting significant constraints on supplies in the regional market. Demand strengthened amidst limited availability and firm consumption from the soap and detergent segment in the region. Due to the heavy shipping charges, ANSAC announced a hike of +USD 25/MT on Soda Ash, whereas the FOB Texas prices settled at USD 248/MT for the April deliveries.
The Asia Pacific Soda Ash market remained stable during the first quarter of 2021. The supplies were ample, as the downstream enquiries declined from several industries but significant offtakes from the Soap and detergent sector as a result of firm demand, balanced to market fundamentals throughout the quarter. Even at times of sluggish offtakes, price parity was witnessed due to the higher freight rates. Prices of Soda Ash in FOB Shanghai during March settled at USD 245 per MT.
The European Soda Ash market remained balanced to tight during the first quarter of 2021. Several plants operated normally throughout the quarter however, hindrance was witnessed due to the transportation lag as the Amsterdam-Rotterdam-Antwerp route were disrupted amid cold weather. Demand remained constant as the offtakes from the downstream sector were ample. Solvay initiated carving out its Soda Ash and derivatives segment as a separate legal entity procedure before selling a business.
For the Quarter Ending September 2020
Asia’s Soda Ash market is anticipated to remained suppressed by ample supplies, particularly in northeast Asia due to rising output and completion of plant turnarounds. On the supply side, Chinese producers lifted the operating rates to reach normalcy to cater to the consistent demand. However, relatively sagging demand resulted in the pile-up of huge stocks of Soda Ash, with inventories in China reaching their peak by the end of Q3. This high stock resulted in the significant fall in export and import prices of Soda Ash in China during the quarter. Overall Soda Ash industry is weakly organized with Indian players still eyeing on pick up in demand patterns amid pandemic-induced slowdown. With producers highlighting weak downstream demand, FOB China Soda Ash prices were assessed at the USD 185 per tonne levels in mid-August.
Despite improved performance of some of the downstream Soda Ash consumers, overall product demand has shown no considerable movement during the third quarter. Although there was the slight improvement in demand outlook during some months, the overall demand has remained pressured under the economic fallout throughout H22020. Several Soda Ash producers were heard operating at reduced efficiencies to manage their inventory levels. The US manufacturer Genesis Alkali put on hold its Trona based plant located in Granger Wyoming till September which was later extended till the end of the year, further affecting the export volumes.
Throughout Europe there is little change in the market conditions of Soda Ash. Major soda ash players claimed that there is a little change in the pricing in the third quarter as producers are preparing to lift the market conditions. The announcement of Ciech to suspend the operations at its Romanian unit in Govora, had the little effect on overall Soda Ash supply. Key producers of Soda Ash stated that margins have been squeezed, pressured under the weak demand across the region as they could hardly see any improvement in the consumption patterns in the upcoming quarter.