The demand for soda ash in India showed good growth of 10-11% in the 2012-13 period, due to healthy growth from the detergents and chemicals segments. Demand from the flat glass and bottle glass industries, on the other hand, witnessed below-par growth.
Demand in India for soda ash in 2012-13 showed good growth of 10-11%, led by healthy growth from the detergents and chemicals segments (that from the flat glass and bottle glass industries witnessed below-par growth). However, a large part of the demand was met by rising imports, up 15-20% to around 650,000 tonnes.
The price of soda in India has mainly been stable since October 2012, when it was INR 1,150 for 50 kg, while in March, it was around INR 1,165 for 50 kg. The cost of shipments is an issue. A little over 80% of the country’s soda ash making capacities are in Gujarat. “For every tonne transported from Gujarat to the southern and eastern markets, the logistic costs are USD 75-80 a tonne. Whereas for the Chinese and European manufacturers, the logistic costs are only USD 35-40 a tonne to these ports,” said a senior official in Gujarat Heavy Chemicals Ltd. “Despite this, we’re producing to capacity.”
Recognizing the problem, the government has imposed anti-dumping duties on some exporting countries. A final notification on Russia and Turkey is pending.
“Costs have gone up by five to 10%, while the companies have been unable to pass these onto consumers,” said an industry source, adding the impact on margins will be high this year.
“Factors such as high cost of power and infrastructure challenges have resulted in high cost of production. We are not averse to regular imports but cheap imports in the form of dumping are adversely affecting the industry,” said an official of the Alkali Manufacturers’ Association of India.
Production in the country was 218,000 tonnes in January 2013, an increase compared to 198,000 tonnes in October 2012.