Global Market Outlook on Sodium Sulfate

  • The current overall sodium sulfate capacity is estimated to be around 20.2 Mn MT, and there are no planned capacity additions announced so far for the next three years
  • The current global demand is estimated to be 16.5 Mn MT, and it is expected to grow at a CAGR of 2.8% through 2021, with Asia being the major growing region
  • The demand is mainly driven by the detergent market, despite a general slowing trend observed in this industry

Capacity– Demand Dynamics (2016–2022F)

  • Over 50% of the sodium sulfate capacity if from natural origin, with China being the major production region
  • The global market is currently operating over 75 percent capacity, and there is sufficient supply for the next five years to meet the demand

Demand by Application (2009–2022F)

  • Increasing penetration of liquid detergents and the rising need for Sulfate-free detergents had contributed to the general slowdown of sodium Sulfate demand from the detergent industry
  • Rapid slowdown in the paper business, due to large-scale penetration of digital media, has also affected the demand for sodium sulfate from the print sector
  • There are no new applications of sodium sulfate in the market

Sodium Sulfate: Porter’s Five Forces Analysis

Supplier Power 

Low power, as the production does not depend on a specific raw material

  • Natural process suppliers: Majority of natural process suppliers have their own mines
  • By-product process suppliers: There are a number of by-product production methods available for the production of synthetic sodium sulfate and hence, the supplier power is limited

Barriers to New Entrants

Decreasing profit margin

  • As there are many by-product production methods available, the cost of production is negligible and hence, the price of sodium sulfate obtained by by-product method has less profit margin
  • Natural-based manufacturers are also forced to decrease their profit margins to match the synthetic sodium sulfate prices

Intensity of Rivalry

Competition through low price

  • Intensity of rivalry is low to medium, as the market is currently oversupplied
  • Due to high profit margins for Lithium carbonate, Chinese lithium carbonate manufacturers are willing to sell by-product sodium sulfate at low prices, which is a threat to other suppliers following different by-product route

Threat of Substitutes

Changing consumer behavior

  • Shift to liquid from powdered detergents is expected to reduce consumption by 20–25 percent
  • Below are the probable substitutes for other applications
  • Pulp and paper: Emulsified sulfur and caustic soda
  • Glass making: Soda ash and calcium sulfate

Buyer Power

Surplus supply and low growth

  • Apart from Latin America, all other regions have significant domestic capacity
  • With North America and Europe predominantly shifting to liquid detergents, the surplus sodium sulfate capacity is exported to other regions
  • Detergents, being the largest downstream application, give CPG industry buyers a better negotiating power

Sodium Sulfate: APAC (excluding India) Market Dynamics 

  • Asia is the major producer and consumer of sodium sulfate, with China contributing to around 76% of Asia’s total production
  • The current demand is estimated to be around 11.8 Mn MT and is expected to grow at a CAGR of 2.8% with detergents constituting around 52% of the total consumption of Sodium Sulfate

Capacity – Demand Dynamics (2016–2022F)

  • The current capacity is sufficient to meet the expected demand until 2022.However, the supply–demand balance is expected to become tight post 2022
  • China ‘s majority of production come from natural process, by-product process, especially from Lithium Carbonate is gaining momentum, due to cost advantage

Demand by Application (2009–2022F)

  • Powder detergents continue to be the major downstream application with its consumption following a uptrend for the past ten years
  • Sodium sulfide production accounts for approximately 20% of the total sodium sulfate consumption in 2016, with China being the exclusive market
  • As Sodium Sulfide is produced by reduction of sodium sulfate by powdered coal, sodium sulfide consumption is expected to decrease, due to China’s stringent environmental policy against usage of Coal