Trona production flat

Production levels remained the same for Wyoming's soda ash industry last year, but the estimated value of the product dropped by about $10 million, according to a new industry report.

Overall, global demand for soda ash is expected to grow by up to 2 percent this year, notwithstanding economic and energy problems in certain areas of the world, the U.S.Geological Survey report predicts.

The industry will continue to face competition from Asian producers over the next few years, primarily from China, experts say.

Southwestern Wyoming holds almost all of the nation's mineable trona reserves and the world's largest deposits of trona. The four producers in Wyoming operating out of the Green River Basin in western Sweetwater County account for more than 90 percent of domestic production.

Wyoming's four producers mine about 15 million tons of trona each year. The industry is the largest employer in both Sweetwater and Uinta counties in southwestern Wyoming.

Soda ash is an alkali chemical that is refined from the mined trona and is used in a variety of industrial and commercial products, including glass, detergents and textiles.

Worldwide, China has experienced both the fastest increase in consumption and production capacity during the last decade. In 1996, China produced 2 million tons of soda ash. That amount rose to 9 million tons by 2000.

Industry analysts have long contended that China has the potential -- with 1.3 billion possible consumers -- to become a huge importer of Wyoming soda ash.

"But China continues to expand its soda ash manufacturing capability," said Dennis Kostick, who tracks the soda ash industry for the USGS.

"Soda ash demand in China is very strong, with domestic supplies being augmented by imports from the U.S.," Kostick said. "It is anticipated that competition with China for markets in Asia will be strong in the future."

The report said despite major price increase attempts that were initiated by Wyoming producers in 2001, the estimated total value of domestic soda ash produced in 2002 was $770 million, about $10 million less than 2001's $780 million.

The industry was optimistic that the projected increase in exports in the last two quarters of 2002 could bolster soda ash sales and revenue, the study said. To stimulate profitability, the industry in September announced a $7-per-ton increase in the spot price of soda ash.

In keeping with a five-year trend, American soda ash production stayed at right around 10.3 million tons in 2002, according to year-end production records.

Kostick said with a nameplate capacity of 14.5 million tons, the industry operated at about 78 percent of total capacity in 2002.

The report said domestic demand should be slightly higher in 2003. It said overall global demand for soda ash is expected to grow from 1.5 percent to 2 percent annually.

Glass was still the largest end use of soda ash in 2002, accounting for just over 48 percent of total domestic consumption.

Kostick noted that Wyoming's largest soda ash producer, FMC, Inc., signed a letter of intent with Powerball, Inc. to supply a sodium compound to the Utah-based power company.

The compound will be used to manufacture small pellets that store hydrogen for release on demand when mixed with water.

"The technology is particularly useful to developing countries that have limited energy resources," he said. "The hydrogen can power fuel cells to operate automobiles, houses, or nearly anything that is currently powered by electricity."

There are currently six American soda ash producers, including the four international companies operating out of the Green River Basin, one company in California operating one plant and one company in Colorado operating the newest soda ash plant in the country.

The report said because of mounting financial pressures, the parent company of the Colorado plant decided to sell its 60 percent share early in 2002.

The only company that was interested in purchasing the plant was the remaining partner, which is attempting to secure financing.

600450 Trona production flat
Date: 20 February 2003

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