US soda production "money scene" is good

Business Club March 12th 2012 The US soda ash industry is expected to continue its strong momentum. Because both the domestic and export demand in the United States have grown, it is enough to sustain the recovery of production. In 2012, we estimate that the utilization rate of global soda ash production capacity will be around 80%. Taking into account the low cost advantages of the United States, we expect that the US soda ash plant will still operate at full capacity. Mark Douglas, president of Industrial Chemicals, US-based Fumei Company stated recently.

This view of Douglas is very representative in the industry. From the performance of the first two months of 2012, the global soda ash market remains healthy. He expects the global soda ash market demand in 2012 will reach 55 million tons, an increase of 5% over 2011.

In addition to manufacturing companies, consulting companies are also optimistic about global soda ash market demand. The US consulting company IHS Chemical Co., Ltd. stated that the global soda ash market demand is about 52.2 million tons in 2011. This market is expected to increase at an average annual rate of 4.3% in the next five years and reach 64.6 million tons by 2016. Among them, the demand for the Chinese market is growing at a faster rate and will grow at an annual rate of 5.3%.

According to statistics from the US Geological Survey, the soda ash production in North America was about 10.7 million tons in 2011, which is still a 4% to 5% difference from the peak of 11.3 million tons in 2008. IHS Chemical Company stated that the US soda ash production will grow at an average annual rate of about 2.3% from 2012 to 2016 to meet the growth in domestic and export demand. It is estimated that by 2015, the United States will add 1.3 million tons of soda ash production.

IHS Chemicals further analyzed the soda imports and exports in North America. In 2011, North America remains the world's major net net exporter of soda ash. It is estimated that the export volume will exceed 5.5 million metric tons. This figure will increase to 6.4 million metric tons or more by 2016, mainly because exports from the United States will increase substantially. Soda ash imports in the region mainly occur in Canada and Mexico.

The industry believes that the United States has a significant cost advantage over China, which has a higher production cost, and therefore even if there are soda ash production surpluses in some regions of the world, US producers can still maintain a good level of profitability. Mark Douglas pointed out: 'At present, global soda ash production capacity is in a surplus state, especially in China and Europe. '

Recently, soda ash producers in North America have successfully raised the prices of domestic and export goods in 2012, although the price increase varies according to the terms of the contract. For the U.S. market, the average price increase in 2012 is about US$9 (t price, the same below): For large customers, the contract price rises to 155-190 U.S. dollars (Wyoming outbound price); for small customers, The price of the contract rose to 191-219 U.S. dollars (Wyoming outbound price).

Sustained by the growth in market demand, Phu My Company has reactivated its idle soda production facility in Granger, Wyoming. Douglas said: The 570,000 tons of soda ash production plant is currently operating at full capacity, while in 2011 production was only 200,000 tons. In addition, we also plan to build a new soda plant with an annual output of 700,000 tons at the Granger plant. We are currently conducting a feasibility study and we expect to make a decision within the year.

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