Soda Ash Prices Explained
Soda ash prices continuously tumbled down to 15.05% in decreasing value as an increasing supply of the commodity overshadowed its current demand. The Asian and North American markets were on the negative side as the downstream glass market proved inadequate to cover the commodity’s increasing inventory.
Furthermore, India’s Tata Chemicals reported a decline in its soda ash revenue (for 3 consecutive quarters and its sales volume decreased by 10% ) due to its lower prices and soft demand.
Why are soda ash prices fluctuating?
1. Weak Demand
Despite the increase in demand from the glass industry, soda ash prices showed a weaker trend in the Asian market. Additionally, according to ChemAnalyst (a digital platform keeping real-time updates on chemicals and petrochemicals market fluctuations), soft international inquiries and demand contribute to its declining market value.
As a result, manufacturers and traders exercised caution about the anticipated market shift.
2. Production Costs
In response to high demand and favorable market conditions, producers may increase their soda ash production to meet the needs of the market. This helps stabilize prices and ensures adequate supply.
Additionally, if the market is oversupplied or if production costs are too high, manufacturers may reduce production. This can help prevent a surplus and stabilize prices. Overall, labor, maintenance, equipment, and operational expenditures are integral parts of the total production expenses for soda ash and its value.
3. Raw Material Costs
The prices of raw materials used in soda ash production such as trona or sodium chloride, can fluctuate due to market conditions, geopolitical factors, or weather-related issues. The main ingredients in producing soda ash are sodium chloride or salt and limestone.
Additionally, soda ash prices are largely affected by upstream energy prices which experience fluctuating prices due to the escalating tension in the Red Sea. Thus, the market suffers low demand and expensive manufacturing costs of its raw materials which significantly impact its marketability.
Which variables impact the price of soda ash?
- Weak Demand
- Production Costs
- Raw Material Costs
- Energy Costs
- Market Speculation and Trading
- Economic Factor
- Currency Change Rate
- Trade Policies and Tariffs
Where does soda ash come from?
The Solvay process or ammonia-soda process is the major industrial process for the production of sodium carbonate. Belgian chemist Ernest Solvay developed this method in modern form during the 1860s.
The traditional methods of obtaining soda ash involved the burning of plants that grow in sodium-rich soils and collecting their ashes. You can produce soda ash through different processes:
1. The Solvay Process – The most common and widely used method for manufacturing soda ash.
Ammonia Soda Method – Limestone is first refined to produce Calcium Oxide and then mixed with water to create Calcium Hydroxide. Ammonia is added to the Calcium Hydroxide to form a solution of ammonium chloride. This solution is reacted with carbon dioxide from the atmosphere to form calcium carbonate and ammonium bicarbonate.
Formation of Sodium Carbonate – The ammonium bicarbonate is heated to decompose into water, carbon dioxide, and ammonia. The resulting mixture contains sodium bicarbonate. Additionally, it is heated again to produce sodium carbonate and water.
2. The Trona Ore Mining Method – It is a naturally occurring mineral that contains sodium carbonate and is mined to produce soda ash.
Mining and Crushing – Trona ore is extracted from underground mines and crushed into smaller pieces.
Calcination and Purification – Crushed trona ore is heated in a rotary furnace to remove impurities and excess water. Next, the anhydrous sodium carbonate is crushed further and screened for purification.
Dissolution and Filtration – The purified soda ash is dissolved in water and the insoluble impurities are filtered out.
Crystallization and Drying – The filtered solution is cooled and allowed to crystallize, forming soda ash crystals. Then, the crystals are dried to remove excess water, resulting in the final soda ash product.
What is the future price of soda ash?
Market analysts predicted an increase in soda ash prices in the coming years as demand for glass, soap, and detergents from chemical industries frequently increases. Additionally, the slow Chinese production due to equipment malfunctions and adverse weather conditions will likely influence its rebounding value.
Coherent Market Insights reported a 6.2% CAGR growth from 2023 to 2033. This is due to the rising demand for flat glass from the construction industry and rising global washing soda consumption. Overall, a rough price estimate of soda ash in 2030 will be around $400-$450 per metric ton.