Soda ash plays a key role in many industries, with the glass industry accounting for about 60% of global consumption.
       Sheet glass is the largest segment of the glass market, and container glass is the second largest segment of the glass market (Figure 1). Solar control glass used in solar panels is the fastest growing area of ​​demand.
       In 2023, Chinese demand growth will reach an all-time high of 10%, with net growth of 2.9 million tonnes. Global demand excluding China fell by 3.2%.
       Soda ash production capacity will remain broadly stable between 2018 and 2022, as many planned expansion projects have been delayed due to the COVID-19 pandemic. In fact, China suffered a net loss of soda ash capacity during this period.
       However, the most significant growth in the near term will come from China, including 5 million tonnes of new low-cost (natural) production that will start ramping up in mid-2023.
       All of the largest expansion projects in the US in recent times have been undertaken by Genesis, which will have a combined capacity of around 1.2 million tonnes by the end of 2023.
       By 2028, 18 million tonnes of new capacity is expected to be added globally, with 61% coming from China and 34% from the US.
       As production capacity increases, the technological base also changes. The share of natural soda ash in new production capacity is growing. Its share in the global production volume is expected to reach 22% by 2028.
       The production costs of natural soda ash are generally significantly lower than those of synthetic soda ash. Thus, changes in the technological landscape also change the global cost curve. Competition is based on supply, and the geographic location of new capacity will also affect competitiveness.
       Soda ash is a basic chemical used in end-use applications that are closely related to our daily lives. Thus, the growth in demand for soda ash has traditionally been driven by developing economies. However, the demand for soda ash is no longer driven solely by economic growth; the environmental sector is also actively contributing to the growth in demand for soda ash.
       However, the absolute potential of soda ash in these end-use applications is difficult to predict. The prospects for using soda ash in batteries, including lithium-ion batteries, are complex.
       The same is true for solar glass, and international energy agencies are constantly revising their solar energy forecasts upward.
       Trade plays an important role in soda ash production, as production centres are not always located near areas of high demand, and about a quarter of soda ash is transported between major regions.
       The United States, Türkiye and China are important countries in the industry due to their influence on the shipping market. For American producers, demand from export markets is a more significant driver of growth than the mature domestic market.
       Traditionally, American manufacturers have grown their production by increasing exports, helped by a competitive cost structure. Major shipping markets include the rest of Asia (excluding China and the Indian subcontinent) and South America.
       Despite its relatively low share in global trade, China has a significant impact on the global soda ash market due to fluctuations in its exports, as we have already seen this year.
       As noted above, China added significant capacity in 2023 and 2024, raising expectations of oversupply, but Chinese imports reached record levels in the first half of 2024.
       At the same time, U.S. exports rose 13% year-on-year in the first five months of this year, with the biggest gains coming from China.
       Demand growth in China in 2023 will be extremely strong, reaching approximately 31.4 million tonnes, mainly driven by solar control glass.
       China’s soda ash capacity will expand by 5.5 million tonnes in 2024, exceeding near-term expectations of new demand.
       However, demand growth has once again exceeded expectations this year, with demand growing 27% year-on-year in the first half of 2023. If the current growth rate continues, the gap between supply and demand in China will no longer be too large.
       The country continues to increase solar glass production capacity, with total capacity expected to reach approximately 46 million tons by July 2024.
       However, Chinese authorities are concerned about excess solar glass production capacity and are discussing restrictive policies. At the same time, China’s installed photovoltaic capacity increased 29% year-on-year from January to May 2024, according to the National Energy Administration.
       However, China’s PV module manufacturing industry is reportedly operating at a loss, causing some small assembly plants to idle or even cease production.
       At the same time, Southeast Asia has a large number of PV module assemblers, mostly owned by Chinese investors, which are important suppliers to the US PV module market.
       Some assembly plants are reported to have recently stopped production due to the US government lifting the import tax holiday. The main export destinations for Chinese solar glass are Southeast Asian countries.
       While soda ash demand growth in China has reached record levels, soda ash demand dynamics outside of China are more diversified. Below is a brief overview of demand in the rest of Asia and the Americas, outlining some of these trends.
       Import statistics provide a useful indicator of soda ash demand trends in the rest of Asia (excluding China and the Indian subcontinent) due to lower local production capacity.
       In the first five to six months of 2024, the region’s imports reached 2 million tons, which is 4.7% more than in the same period last year (Figure 2).
       Solar glass is the main driver of soda ash demand in the rest of Asia, with sheet glass also likely to make a positive contribution.
       As shown in Figure 3, there are several solar power and flat glass projects planned in the region that could potentially add about 1 million tonnes of new soda ash demand.
       However, the solar glass industry also faces some challenges. Recent tariffs such as anti-dumping and countervailing duties imposed by the United States may affect the production of photovoltaic modules in countries such as Vietnam and Malaysia.
       Tariffs on components made in China require manufacturers in these countries to source key components from suppliers outside of China to avoid high tariffs. This increases production costs, complicates the supply chain, and will ultimately weaken the competitiveness of Southeast Asian PV panels in the U.S. market.
       Several Chinese PV panel assemblers in Southeast Asia reportedly halted production in June due to the tariffs, with further production stoppages likely in the coming months.
       The Americas region (excluding the US) is highly dependent on imports. Thus, overall changes in imports can be a good indicator of underlying demand.
       The latest trade data show negative import dynamics for the first five to seven months of the year, down 12%, or 285,000 metric tons (Figure 4).
       North America, by far, saw the largest decline, down 23% or 148,000 tonnes. Mexico saw the largest decline. Mexico’s largest soda ash demand sector, container glass, was weak due to weak demand for alcoholic beverages. Overall soda ash demand in Mexico is not expected to increase until 2025.
       Imports from South America also fell sharply, by 10% year-on-year. Argentina’s imports fell the most, by 63% year-on-year.
       However, with several new lithium projects scheduled to come on line this year, Argentina’s imports should improve (Figure 5).
       In fact, lithium carbonate is the largest driver of soda ash demand in South America. Despite the recent negative sentiment surrounding the lithium industry as a low-cost region, the medium- and long-term outlook is positive.
       Export prices of major suppliers reflect changes in global market dynamics (Figure 6). Prices in China tend to fluctuate the most.
       In 2023, China’s average export price was US$360 per metric ton FOB, and at the beginning of 2024, the price was US$301 per metric ton FOB, and by June, it fell to US$264 per metric ton FOB.
       Meanwhile, Turkey’s export price was US$386 per metric ton FOB at the start of 2023, only US$211 per metric ton FOB by December 2023, and only US$193 per metric ton FOB by May 2024.
       From January to May 2024, U.S. export prices averaged $230 per metric ton FAS, below the annual average price of $298 per metric ton FAS in 2023.
       Overall, the soda ash industry has recently shown signs of overcapacity. However, if current demand growth in China can be maintained, the potential oversupply may not be as severe as feared.
       However, much of this growth is coming from the clean energy sector, a category whose absolute demand potential is difficult to accurately predict.
       The chemical market intelligence division of OPIS, Dow Jones & Company, will host the 17th annual Soda Ash Global Conference in Malta from October 9-11 this year. The theme of the annual meeting is “The Soda Ash Paradox”.
       The Global Soda Ash Conference (see left) will bring together global experts and industry leaders from all market sectors to hear expert forecasts for the soda ash industry and related industries, discuss market dynamics, challenges and opportunities, and explore the impact of changing global market trends, including how the Chinese market will impact the world.
       Glass International readers can receive a 10% discount on conference tickets using the code GLASS10.
       Jess is the Deputy Editor of Glass International. She has been studying creative and professional writing since 2017 and completed her degree in 2020. Before joining Quartz Business Media, Jess worked as a freelance writer for various companies and publications.