HOUSTON --Record-high global demand has led the second-largest US soda ash producer to raise prices by an average of 38%, industry sources said on Thursday, prompting speculation that more hikes would follow.
The Green River, Wyoming-based General Chemical Industrial said it will increase off-list prices for bulk and package dense soda ash by $50/short ton (?0/tonne) and list prices for bulk and package material by $75/short ton (?4/tonne) effective immediately.
US soda ash contract prices were assessed at $145-185/short ton on 2 May, according to global chemical market intelligence service ICIS pricing.
I ve never seen anything of that magnitude, said Ted Fastert, national sales manager at competing producer Solvay. You might have some folks say they can t make end-use products at prices this high. But the export markets are like a blank check.
Fastert said his company was still mulling price increases of its own. Buyers and market analysts did not immediately return calls for comment.
General Chemical, which India s Tata Chemical bought for some $1bn in March, didn t elaborate as to what led to the increase. But over the past few months, many soda ash market players forecast a jump in prices due to soaring energy costs and extremely high demand in Latin America and Asia.
Another industry source was shocked by the move and wondered if Tata was trying to take advantage of high export demand to recover its investment in General Chemical, she said.
"It's going to be an interesting week in soda ash," she said of the situation.
US companies shipped 58% of the 878,000 tonnes of soda ash they produced in February overseas, the US Geological Survey (USGS) said. Nearly 36% of imports went to Latin America and 31% to Asia.
Overseas supply tightened further after bad weather conditions caused exporter American Natural Soda Ash Corporation to declare force majeure on shipments from its port in Portland, Oregon.
Soda ash buyers and sellers negotiate contracts annually, but producers traditionally change off-contract prices once or twice a year. The changes are then incorporated into the following year s contract prices.
However, at up to five times higher than the $15/short ton hikes producers introduced in May and September of the last two years, the scope of General s latest increase is rare, if not unprecedented.
General Chemical produces about 2.5m short tons/year of soda ash, second only to the FMC s nearly 4m short tons/year. Other producers include Solvay, OCI and Searles Valley Minerals.
The Green River, Wyoming-based General Chemical Industrial said it will increase off-list prices for bulk and package dense soda ash by $50/short ton (?0/tonne) and list prices for bulk and package material by $75/short ton (?4/tonne) effective immediately.
US soda ash contract prices were assessed at $145-185/short ton on 2 May, according to global chemical market intelligence service ICIS pricing.
I ve never seen anything of that magnitude, said Ted Fastert, national sales manager at competing producer Solvay. You might have some folks say they can t make end-use products at prices this high. But the export markets are like a blank check.
Fastert said his company was still mulling price increases of its own. Buyers and market analysts did not immediately return calls for comment.
General Chemical, which India s Tata Chemical bought for some $1bn in March, didn t elaborate as to what led to the increase. But over the past few months, many soda ash market players forecast a jump in prices due to soaring energy costs and extremely high demand in Latin America and Asia.
Another industry source was shocked by the move and wondered if Tata was trying to take advantage of high export demand to recover its investment in General Chemical, she said.
"It's going to be an interesting week in soda ash," she said of the situation.
US companies shipped 58% of the 878,000 tonnes of soda ash they produced in February overseas, the US Geological Survey (USGS) said. Nearly 36% of imports went to Latin America and 31% to Asia.
Overseas supply tightened further after bad weather conditions caused exporter American Natural Soda Ash Corporation to declare force majeure on shipments from its port in Portland, Oregon.
Soda ash buyers and sellers negotiate contracts annually, but producers traditionally change off-contract prices once or twice a year. The changes are then incorporated into the following year s contract prices.
However, at up to five times higher than the $15/short ton hikes producers introduced in May and September of the last two years, the scope of General s latest increase is rare, if not unprecedented.
General Chemical produces about 2.5m short tons/year of soda ash, second only to the FMC s nearly 4m short tons/year. Other producers include Solvay, OCI and Searles Valley Minerals.
