Soda Ash Industry Fights Recession, Chinese Rivals

Date: 30 July 2009
Source: SFgate.com
In the mines, 1,600 feet underground, employees work in noisy, dimly lit conditions amid clouds of musky trona dust.

On the surface, plant workers operate the heated, noisy machines that process the yellow trona into powdery soda ash.
 
Monte Morlock, president of the United Steelworkers Local 13214 at FMC's Green River facility, said production has slowed, but there haven't been any layoffs at FMC and he hasn't heard about any at the area's other plants.
 
"The soda ash plants out here play a very important role in this community," Morlock said. "It's the type of job that you can raise a family and you can stay in the area. You don't have to be gone for days on end."
 
The United States produced a record 11.3 million metric tons of soda ash in 2008 and exported about 47.6 percent of that, according to the USGS.
 
"The U.S. had really been sold out (of soda ash) for five years up through 2008," said Bill Breunig, director of sales and marketing for Philadelphia-based FMC. "Both the U.S. and the export business really began to slow up in the December time frame and into the first quarter. Basically, as things atrophied, the Chinese were very aggressive on gearing up exports."
 
Breunig said after a slowdown in the first half of 2009, the industry expects business to pick up and operate at about 95 percent of capacity for the year.
 
The latest figures available from the USGS show domestic soda ash production in May was 780,000 metric tons, down almost 27 percent from 987,000 metric tons in May 2008. April's production of figure of 664,000 metric tons was the lowest monthly production figure since at least 1994.
 
Meanwhile, trona production in Wyoming for the January-May period was down more than 13 percent from the previous year, according to the USGS.
 
As soda ash producers wait for domestic and global demand to pick up, they're lobbying for the federal government's help in fighting the Chinese government's new export incentive.
 
China overtook the United States as the world's top soda ash producer in 2003. The Chinese currently produce about 18 million metric tons of soda ash per year, the USGS' Kostick said.
 
In April, the Chinese government introduced a 9 percent rebate on its 17 percent value-added tax on soda ash exports. American producers say the action gave Chinese producers an unfair advantage in the global marketplace and drove down prices for American exports.
 
"So during this period of plummeting demand, including a 14 percent drop of demand in China in the first quarter of 2009, here you have the Chinese essentially trying to export their way out of a recession and keep jobs in China by increasing exports," said John McDermid, president of IBC Inc., a Washington, D.C., company that consults for soda ash distributor American Natural Soda Ash Corp.
 
Wyoming's congressional delegation recently sent letters to U.S. Trade Representative Ron Kirk and Secretary of State Hillary Rodham Clinton trying to influence the Obama administration's trade discussions with the Chinese.
 
McDermid said he hopes the Chinese export policy will be part of discussions of the U.S.-China Strategic and Economic Dialogue taking place Monday and Tuesday in Washington. The industry will also push for inclusion in discussions of the U.S.-China Joint Commission on Commerce and Trade, he said.
 
"We basically see ourselves as a case study," he said. "This is real big picture stuff."
 
Meanwhile, the American Natural Soda Ash Corp. is working to catch up with Chinese exporters, said Breunig, who sits on the ANSAC board along with his position with FMC.
 
He said the Wyoming producers intend to use their cost position to pick up more customers. Making soda ash from trona is cheaper than synthetic methods, which account for most of China's production, according to the industry.
 
"As the lowest-cost producer in the world, we should be operating at the best operating rates," Breunig said. "That's the whole strategic thrust of this type of businesses is to get the low-cost position, so we just need to execute on that. That's what's going on right now."
 
Morlock, the local Steelworkers president, works as a maintenance mechanic in his 34th year at FMC. He said workers are concerned the recent slowdown could affect their jobs.
 
"I'm being optimistic and I'm hoping this economy starts picking up because I sure as heck don't want to see anyone face a layoff or anything like that," Morlock said.

600450 Soda Ash Industry Fights Recession, Chinese Rivals glassonweb.com

See more news about:

Others also read

LandGlass Won the Silver Award at “The Third China Dual-use Technological Innovation Application Contest”.
The 2019 exhibition will be held in Guangzhou-Pazhou-Canton Fair from August 22nd to 24th.
Recently, LandGlass was named as one of the “Outstanding Private Enterprises in Luoyang - High Growth Innovative Entities” by the CPC Luoyang Municipal Committee and the People’s Government of Luoyang Municipality.
On November 22, the municipal office of civilization and office of credibility held the “2018 Credible Private Enterprises” commendation conference at the 2nd floor conference room of the Luoyang city hall.
Permasteelisa S.p.A welcomes the LIXIL Group Corporation’s announcement about the agreement with Grandland Holdings Group Limited, a leading Chinese architectural design and construction company, to terminate planned Permasteelisa transaction.
Asia’s No. 1 fenestration exhibition - FENESTRATION BAU China 2018 (”FBC”) concluded on November 3, 2018 in Beijing.

From industry

No. 160 Yichuan Rd.,
Jiaonan Shi
Qingdao Shi
Shandong Sheng, 266000
China

Add new comment