Availability keeps prices stable

By Staff -- Purchasing, 4/9/1998

Sodium bicarbonate tags will remain stable through most of 1998 because availability continues to outpace demand. Buyers forecast industrial-grade prices will remain at an average of 17(cent)/lb while U.S.P.-grade prices stay at 19(cent)/lb, according to Purchasing's monthly survey of chemical buyers.

Pricing for most grades of sodium bicarbonate remained stable in 1997. Industrial-grade tags averaged 17(cent)-19(cent)/lb, and U.S.P.-grade prices were steady at 19(cent)/lb. Strong demand, however, put pressure on feed-grade pricing, and producers boosted prices for this grade by 50(cent)-75(cent)/cwt in the fourth quarter.

SUPPLY: Ample

Sodium bicarbonate supplies remain more than adequate, but supply/ demand conditions are somewhat tighter for differentiated grades. U.S. operating rates are running in the mid-70% range. There are five domestic producers of sodium bicarbonate in the U.S. with total capacity of 712,000 tons/yr. They include Church & Dwight (the largest producer), FMC Corp., Rhodia (formerly Rhone-Poulenc's specialty chemicals business), Natrium Products, and North American Chemical. IMC Global Inc. is purchasing North American Chemical as part of its acquisition of Harris Chemical. The company expects to complete the deal early in the second quarter.

Several companies say they're planning to enter the sodium bicarbonate business. Among them, AmerAlia intends to build a sodium bicarbonate production unit to process its nahcolite from leased land in Colorado. The company expects to begin construction of the plant this spring. Airborne Technologies, located in Calgary, Alberta, plans to construct a plant to convert sodium sulfate into sodium bicarbonate.

DEMAND: Slow but steady

In 1998, domestic demand for sodium bicarbonate will approach 500,000 short tons, according to Roger Shamel, president of Consulting Resources Corp., Lexington, Mass. As in the past, sodium bicarbonate consumption will continue to grow modestly at 1%-3%/yr. The faster growing end-use markets include animal feed, pharmaceutical, and health and beauty applications.

One area to keep an eye on is export levels. Exports, especially to Asia, are another large market for sodium bicarbonate. If the recent downturn in Asian business continues, exports of sodium bicarbonate into Asia may be adversely affected this year.

MARKETS: Varied

Sodium bicarbonate goes into a wide variety of end uses. The largest application at about 30% of demand is food uses. The second-largest market at 25% of consumption is animal feed. Demand in this application has been strong. Other markets for sodium bicarbonate include chemicals, health and beauty, fire extinguishers and water treatment. Demand is rising faster than the industry average for products in the drug, dialysis, and health and beauty markets.

Major U.S. sodium bicarbonate producers/capacities

(1998, thousand tons/yr)

Church & Dwight Co., Inc.

Green River, Wyo. 185

Old Fort, Ohio 245

FMC Corp.

Green River, Wyo. 70

Natrium Products

Cortland, N.Y. 15

North American Chemical

Rifle, Colo. 125

Rhoida

Cortland, N.Y. 72

Total 712

SOURCE: PURCHASING