Contracts fall, but spot tags stay flat
By Staff -- Purchasing, 3/11/1999
Residual effects from the Asian economic collapse and a fall off in demand have been blamed for the downward spiral in sodium sulfate prices. In the past few months, prices have remained relatively stable for contracts, and spot tags have been flat since the beginning of last year. But buyers predict a further drop in contract pricing in the coming year attributed to non-existent market growth, according to the latest data from Purchasing's monthly chemical transaction price survey.Sodium sulfate contract prices averaged 95¢/lb in the first quarter of last year. Contracts then went down to 94¢/lb and stayed flat until the end of 1998. Buyers predict contract prices will average 85¢/lb by the close of second-quarter 1999, a drop of 9¢/lb.
Spot tags have been flat at $1.20/lb for all of 1998 and are forecast to continue in that trend at least until the first quarter of 2000, according to Purchasing's monthly survey.
One of the main causes for the drop in contract prices may be weak demand in its main markets, which are soaps and detergents and textiles. In the soaps and detergents industry, sodium sulfate has been very popular, comprising as much as 50% of some powdered-detergent formulations, but increasing competition from non-sodium sulfate containing liquid detergents and powders have contributed to the fall off in demand. Analysts predict that consumption of sodium sulfate among soap producers will be down by almost 60% by the end of the year.
Demand for sodium sulfate in the textile industry has dwindled as the major players consolidate and move their facilities overseas. Also, increased imports from Europe and the Far East are cited as reasons for the fall off by market analysts.
In the pulp and paper industry, there has been no discernible growth in demand for sodium sulfate, according to one expert. The current demand of about 70,000 tons/yr is expected to remain flat or decrease slightly in 1999.
Additionally, some producers have halted production of sodium sulfate. FMC Corp. recently halted production at its lithium carbonate plant, located in Bessemer City, N.C., which removed nearly 45,000 tons/yr of capacity from the market.
Another 40,000 tons of sodium sulfate was lost when Sotec Products Ltd.'s main mining operation sunk. The company has not yet been able to restore the equipment necessary to resume operations.
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