Strong demand for Soda Ash hikes prices in India – 27 May 2014

The market price for Soda Ash Light has increased significantly when compared against the the ex-work price due to falling stock positions and increasing demand. This review takes a quick overview of the price trend amid changing demand dynamics in the Indian landscape.

Tata Chemicals Limited and Gujarat Alkalies and Chemicals Limited (GACL) are the two main domestic manufacturers of Soda Ash in the country, whereby the former has a greater market share than latter. On the other hand, countries like Romania and Turkey dominate the Soda Ash imports into the country.

Two week ago the price of Soda Ash Light in Mumbai open market was around Rs. 1,119 per 50 kg (inclusive of all taxes except VAT) bag manufactured by Tata chemicals, while imported Soda Ash Light was selling for Rs. 910 per 50 kg bag (inclusive of all taxes except VAT). However, currently the prices have jumped to Rs. 1,500 per 50 kg (inclusive of all taxes except VAT) bag for Tata manufactured Soda Ash Light and imported Soda Ash Light is priced at around Rs. 1,200 per 50 kg (inclusive of all taxes except VAT)bag.

Interestingly, with effect from 10th April, 2014,  Tata chemicals did an upward price revision for the chemical from Rs. 18,500 per metric tonne to Rs. 19,100 per metric tonne and Rs. 18,800 per metric tonne to Rs. 19,400 per metric tonne for Soda Ash Light and Soda Ash Dense, respectively.

As such, there is a stark difference between the ex-work price and the open market price for the chemical in the Mumbai market.

Most traders in the market cite decreasing stock inventory and escalating demand to be the primary reason for the price hike in the open market. A trader added " The booking price for the chemical into India has recently gained momentum by $20 per metric tonne, on account of strong demand momentum".