Global Processing

US soda ash industry fights recession, Chinese rivals

July 27, 2009
Beneath the arid sagebrush flats of southwest Wyoming, miners work around the clock to grind out millions of tons of trona rock that''s processed into a key ingredient for everything from baking soda and detergent, to glass and paper. According to the Associated Press, four of the United States'' five soda ash producers are located above the Wyoming''s vast trona reserves, which were formed by an evaporating lake 50 million years ago. Soda ash, or sodium carbonate, has been an anchor of the region since the 1940s, but these days, the industry is facing a confluence of difficult challenges. The economic recession, including weak demand for glass in the auto and construction sectors, contributed to a 24 percent drop in U.S. soda ash production between the last three months of 2008 and the first quarter of this year, according to the U.S. Geological Survey. American producers say their competitors in China have flooded the international market with help from a Chinese government export incentive. Chinese soda ash exports grew 40 percent in the first three months of 2009 versus the same period last year, according to industry figures. The four soda ash producers in Wyoming''s Green River Basin -- FMC Corp., General Chemical, OCI Chemical Corp. and Solvay Chemicals -- account for 92 percent of the U.S. industry. Searles Valley Minerals in California is the nation''s only other producer. 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. 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. 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. 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. Meanwhile, the American Natural Soda Ash Corp. is working to catch up with Chinese exporters. Making soda ash from trona is cheaper than synthetic methods, which account for most of China''s production, according to the industry.