Sodium Chloride (NaCl)

Sodium Chloride (NaCl) Global Market Outlook

• Growing demand for PVC will continue to drive the salt industry. Chemical salt demand is closely linked to PVC. In addition to this, global pharma salt demand is expected to reach 800 Thousand MT by 2023.

Porter’s Five Forces Analysis: North America and Europe

Supplier Power

Supplier power becomes inapplicable

• Salt is either mined from rocks or extracted from sea water in the form of brine

• Availability of salt is never a concern and it is the ability to mine, refine and store inventories of salt

• Land locked regions with very less rock reserves (absence of buried dried-up oceans of geologic ages past, under both land and sea, with concentrated salt sedimentary layers) have no scope for salt production, who become entirely import dependent for salt needs

Barriers to New Entrants

• There are three major technologies/production routes for the different kind of salt with similar properties

• Least expensive and widely used method is salt extraction from oceans and lakes and the outcome of this is solar (sea) salt

• Two other methods are associated with extraction of salt through mining; conventional shaft mining (removing solid rock salt and solution (brine)which is later de-watered and crystallized

• Entering the salt market is not difficult, as there several options to produce salt

• A few pointers that could cause hindrances: Logistical considerations heavily influence production facility site selection decisions and these, in turn, heavily influence the size of production units and the structure of the salt industry

Intensity of Rivalry

Level of Consolidation: Low

• High competitive rivalry among players. There are nearly more than 30 well established salt producers respectively in North America and Europe

Threat of Substitutes

• No major substitutes: Not many substitutes are present in the market for salt (NaCl)

• For substituting road salt; calcium chloride, potassium chloride and potassium acetate can be alternatively used but cost will be multifold in comparison to NaCl

• For food applications, there are other salt, like Kcl, calcium and magnesium chloride, which are blended with NaCl to reduce sodium levels, but cannot be used entirely in the place of NaCl

Buyer Power

Dominant Buyers: Road salt

• Salt is the only feedstock for two major end applications: chlor-alkali processing and is almost used as it is for highway de-icing. These buyers wield high buying power owing to very high volumes. In addition to this, the salt industry is highly fragmented

• Small-volume buyers procuring salt for food and feed needs will relatively hold a weaker position

• Mostly, small-volume buyers will require the salt in purer & modified form which will invariably add up the cost for salt producers who will in turn try to pass it on to buyers

Sodium Chloride Global Imports

• The US, Japan and China are the key importers of Salt, together they account for about 64-65 percent of the global imports. India, Australia and Mexico continue to be the key exporters of Salt to these destinations.

Sodium Chloride Global Exports

• India, the Netherlands and Germany are the key exporters of Salt, together accounting for about 65 percent of the global exports. Major production of salt in India is carried out using sea water as the source.