Soda ash capacity expansions cement US position as net exporter
14:58 PM | January 13, 2020 | Francinia Protti-Alvarez
“The significant capacity additions scheduled for the United States over the coming years will translate to a substantial increase in US soda ash exports, strengthening its position as the net exporter,” says Marguerite Morrin, research director/inorganics at IHS Markit. This is despite recently added capacity in Turkey undermining US exports in the short term.
Although energy costs dropped sharply in 2019, the US will maintain its cost advantage position vis-a-vis other producing regions, thanks to the availability of cheap natural gas and coal.
US soda ash exports represent 59% of domestic production. The country exported close to 7 million metric tons (MMt) of soda ash in 2019, accounting for about 42% of all soda ash exports, according to IHS Markit data.
Overall, soda ash demand will grow an annual rate of 1.6% over the next five years, according to IHS Markit data. The glass industry will continue to consume more than half the world’s soda ash production.
However, the global economic slowdown, as well as volatility in energy markets, have affected soda ash demand and production. “Much of the world’s soda ash demand tracks GDP, and without China as an engine of growth, the outlook for flat [architectural, automotive] glass demand over the next decade will be more conservative than what we have seen in recent years. Slower economic growth means weaker flat glass demand, and is likely to signal slower soda ash demand,” Morrin adds.
Stricter environmental controls weigh heavily on China’s mainly synthetic soda ash, placing the country as the number three soda ash exporter behind number two Turkey with its recently added trona-based capacity. The US retains its number one position as a soda ash exporter. Meanwhile, CO2
emissions–related costs, in addition to volatility ensuing from energy input costs, could spell difficult times ahead for European producers.
“Despite its negative impact on costs, the drive toward sustainability—sparked by environmental concerns—is not without its opportunities that could help offset some of the drawbacks of a more lackluster global economy,” Morrin notes.
Offsetting some of the drop in demand growth is the focus on sustainability, which is driving higher demand for container glass and soda ash demand, Morrin says. Regardless of the practical and environmental consequences, public perception is seeing plastic packaging replaced by the glass—at least in some markets.
Meanwhile, the installation of large solar farms in countries such as India and China has already seen flat glass producers move to meet stronger demand for solar glass, Morrin adds.
Linked to renewable energy and soda ash demand is lithium carbonate, used to make some lithium-ion batteries for solar energy storage as well as for electric cars and electronics. Regulations to limit sulfur emissions are contributing to the installation of sulfur emission scrubbers, meaning higher and stronger demand of sodium bicarbonate (a soda ash derivative), Morrin says.
Learn more about the trends transforming the soda ash market at the World Petrochemical Conference in New Orleans, Louisiana, 24–27 March 2020.