China lead Demand for Glass Production
13 September 2010
As a barometer of the glass making industry, according to the latest report on the soda ash,a prime ingredient used in glass manufacturing, emerging economies such as China are the main drivers for growth in the industry.
The report (Soda Ash: Market Outlook to 2015 (10th edition, 2010))points out that 2009 was a difficult year for the industry with global consumption down by 7.6% in 2009 to 44Mt, following growth of 4.2%py between 2000 and 2008.
Consumers in the glass industry, which accounts for 53% of total demand, scaled back purchases during the global economic downturn. The fall was compounded by lower detergent and chemical output, the other major end-uses for soda ash.
China was one of only a handful of countries showing a positive increase in soda ash consumption in 2009 and was responsible for 90% of world growth between 2000 and 2009. In industrialised economies, however, demand for soda ash has been flat due to the maturity of products using soda ash in the market, as well as substitution and competition pressures.
Future demand for soda ash, forecast to grow at 3%py over the next five years, will be led by flat glass, detergents and water treatment. The use of soda ash in mining and metals and flue gas desulphurisation might also spur increased demand. Emerging economies, particularly China and the wider Southeast Asia region, but also the Middle East, South Asia and South America, will continue to provide the best opportunities for soda ash demand growth on a regional basis. The outlook for developed economies is more uncertain.
Production of soda ash is highly concentrated in China, the USA and Europe, together accounted for 80% of total production in 2009. A period of acquisitions in the mid- to late- 2000s has consolidated ownership of capacity. Tata Chemicals and Nirma of India now have operations in more than one region, and operate both natural and synthetic capacity. Chinese companies have expanded synthetic capacity rapidly and some are now of a size comparable with natural producers in the USA. New capacity has also been opened in other countries, most recently in Turkey in 2009.
The report says that total capacity for soda ash production stands at 63Mtpy in mid-2010. Operating rates are recovering from lows of 70% in 2009, but are still some way off reaching the 85% seen in 2007/08. New and expansion projects have the potential to add 15Mtpy to total capacity by 2015, with China contributing a significant proportion to this total and other emerging economies the remainder. China appears to be rapidly heading towards a position of substantial overcapacity, although tighter government targets for raw material and energy consumption could see some rationalisation of older
capacity by 2015.
The report has been produced by Roskill Information Services Ltd, 27a
Leopold Road, London SW19 7BB, England (http://www.roskill.com/soda-ash)