The previously strong growth in China's soda ash industry has show signs of a slowdown in recent months & some manufacturers are beginning to lower their operating rates. Total production volume of soda ash in China reached 17.6M/t in 2007, an 11% gain on 2006. Entering 2008, monthly production statistics were showing strong year-on-year climbs, reaching a peak of 22% in May. But the rate of increase began to decline from there, falling to 16% in June, 14% in July, & 11.5% in August. The figures show a definite slowdown for soda ash production in China, reflecting a flattening in local demand for the product. In June & July, China's production of flat glass, the major application area for soda ash, rose a mere 0.5% year on year. Lower domestic demand has led to higher exports, which totaled 1.31M/t, Jan-Aug/08, up 20% from 2007. This extra flow of product, together with falling ocean freight rates, brought down the Asian spot price, which fell to US$ 350-400/tonne, CFR, down US$ 50/t from the peak, while local prices dropped below the CNY 2,100/t mark in August. Rising costs of energy and raw materials on top of the listless market are putting pressure on profits, triggering reduced operating rates.
