Demand for glass and detergents in emerging markets surged between 2000 and 2008 and soda ash consumption rose by 4.2%/pa to a peak of 48.1M/t. However, the global economic downturn caused demand for these products to fall sharply in 2009, and soda ash consumption fell by almost 8% year-on-year. While N America and Europe were the worst affected regions, consumption in emerging markets, excluding China, also fell. The most significant gains in production from 2000 to 2009 came from China, where output more than doubled to 18.8M/t, 42% of worldwide production in 2009. Low costs and access to freight assisted China in becoming a key exporter, taking market share in Southeast Asia and S America from the previously dominant natural soda ash producers in the USA. The mid-2000s saw a period of industry consolidation, notably with Indian producers acquiring assets in N America, Europe and Africa. China accounted for almost 90% of new or expanded capacity from 2000 to 2008, but new plants were also commissioned in Argentina, Turkey & Uzbekistan. Soda ash production is an energy intensive process & rising costs were a major contributing factor to a sharp increase in prices in 2007-8. Energy surcharges & formula-based contracts have become increasingly common in soda ash purchasing. Demand for soda ash is slowly returning to pre-recession levels in mature markets. Emerging market demand, particularly for flat glass will continue to be the growth driver, but rates are forecast to be lower in the period to 2015 (3%/pa) than witnessed in the mid-2000s. Chinese capacity continues to expand at a rapid pace, but rationalisation of older and less efficient plant could occur. Elsewhere, exports of natural soda ash from Turkey are putting pressure on producers in neighbouring regions, notably Europe. Energy prices are unlikely to fall further, meaning prices could bottom-out in 2010 and increase steadily going forward.
