Soda ash supply will get tighter
Staff -- Purchasing, 6/3/2004 2:00:00 AM
Solvay Chemicals' recent decision to mothball the Parachute, Colo. soda ash facility of its American Soda LLP subsidiary will lead to tighter supplies and higher prices for soda ash in North America, say other soda ash producers.
Shuttering of the soda ash plant was due to "high energy costs and continued losses at the operation," according to a statement from American Soda. The Parachute facility produced soda ash derived from nahcolite, a naturally occurring mineral form of sodium bicarbonate that American Soda mined at nearby Piceance Creek, Colo. That mining operation is also being mothballed. Sodium bicarbonate, another nahcolite-derived product of the Parachute unit, will continue to be made there, but with feedstock from a Solvay soda ash plant in Green River, Wyo. The soda ash production in Parachute will cease "around mid-year," says a Solvay spokeswoman.
The American Soda plant in Colorado was designed with a capacity of 1 million tons/year of soda ash, but industry sources believe it was recently churning out about 600,000 tons/year of the product. Removal of this volume "has effectively made the U.S. market for soda ash sold out," says Gary Vidmer, product manager for soda ash and sodium percarbonate at OCI Chemical Corp., Shelton, Conn. In fact, he says, the loss of the Colorado output will push capacity utilization rates for soda ash to their highest levels since the mid-1990s.
"The U.S. soda ash industry will be running at more than 97% or 98% of its effective capacity once the Parachute, Colo. operations end," says Scott Steffl, sales and marketing manager for the soda ash business at FMC Corp. The soda ash market "is very tight and is expected to stay that way" for the near term, he adds. Compounding this tightness, Steffl explains, is the fact that Solvay will now have to supply perhaps 50,000 tons/year from its Green River soda ash plant to American Soda's still-operating facility in Colorado.
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