Market Assessment

Sodium Sulfate (Na2SO4)

EXECUTIVE SUMMARY
Sodium sulfate, also known as disodium sulfate (Na2SO4), is an inorganic chemical that has several important industrial uses. It is produced from naturally occurring sodiumsulfate-bearing brines or crystalline evaporite deposits, and as a byproduct from different chemical processes, such as ascorbic acid, battery acid recycling, boric acid, cellulose, chromium chemicals, lithium carbonate, rayon, resorcinol, and silica pigments. The byproduct sodium sulfate is considered a waste product but has marketability; both types of sodium sulfate, however, have several important and useful applications in various consumer products, such as soaps and detergents, pulp and paper, and textiles. In North America the trend for Na2SO4 is somewhat negative. The major use of this chemical is as a filler for powdered laundry detergents. However, over the past decade, the use of liquid detergents has increased in popularity which requires no sodium sulfate. In developing countries, the use of powdered detergents is gradually increasing due to the lower costs involved. Global demand is expected to exhibit growth of 23% per year in the near future as exports to Central and South America increase to satisfy the expanding use of powdered detergents. A similar growth pattern is also expected in Asia, the Middle East and other developing countries. Growth in developing countries where dry powder is typically used instead of liquid detergents is expected to be above GDP growth levels. Currently, Europe and Asia constitute over 50% of the total consumed market for sodium sulfate. On the supply side, China is the largest producer and exporter of sodium sulfate. In 2008, China represented more than three-fourths of the global capacity and more than 70% of the production. In North America, the closure of several plants has helped to eliminate the oversupply situation the sodium sulfate market had faced in the past. Temporary suspensions of operations are also occurring as a reaction to the current global economic downturn.

TRENDS
The majority of uses of sodium sulfate have shown flat or negative growth. The major use of sodium sulfate is as an inert filler for powdered laundry detergents. With the growth of super-concentrated liquid detergents which utilizes no sodium sulfate, the demand for powdered laundry detergents is on the decline. Between 2002 and 2007, the powder detergent product consumption in North America dropped by 40% while in Western Europe, powdered detergent sales were down 10% (as compared to an annual growth rate of 6.3% for washing products as a whole). In the mid 1990s the powder/liquid detergent market was split 50/50. By 2001, the market was 40/60 and by 2009, liquid detergent use is estimated at over 80% of the market. However, outside of the U.S. (e.g. Asia, South America), demand for powdered formulations has grown as it is less expensive than its liquid counterparts. Approximately 80% of world sulfate use is for the dry powdered detergents due to the relatively larger populations in developing countries. Consumption of sodium sulfate by the textile industry is apparently strong. Traditionally, salt has been used in the dyeing process to separate organic contaminants, promote salting out of dyestuff precipitates and blending with dyes to standardize concentrated dyes. The equipment used in this process utilized stainless steel, which was susceptible to corrosion because of the salt. The textile industry began substituting sodium sulfate for the salt which is not corrosive to the manufacturing equipment. Foreign textile manufacturers, particularly China and Mexico are importing sodium sulfate to meet demand requirements. In the dyeing process, sodium sulfate is blended with dyes to standardize the concentration of the dyes. Prices for sodium sulfate ranged from $30 per ton in 1970s increasing up to $114 per ton from 2000-2004 and then to $134 per ton from 2005 until present.

USES
The total value of natural and synthetic sodium sulfate sold in the US is estimated at US$40 million as of January 2010. Estimates of U.S. sodium sulfate consumption by end use (from the US Geological Survey Department or USGS) is shown below. As mentioned above, the use of sodium sulfate in soap and detergents has decreased fairly significantly from 46% (of total use) in 2004 to 35% in 2010. Laundry Detergents The largest use is as filler in powdered home laundry detergents for Na2SO4. In North America, this use is waning as domestic consumers are increasingly switching to compact or liquid detergents that do not include sodium sulfate. At low temperatures, Na2SO4 is nonreactive; because of this and given its relatively low cost, it is used as filler in household soaps and detergents. Detergents average about 20% Na2SO4, but some grades have much higher content. Besides adding bulk to the detergent, the appearance of the detergent is improved due to the particle size and whiteness of the sulfate. Also, handling characteristics and the detergents ability to clean is improved. Manufacture of Wood Pulp Another formerly major use for sodium sulfate, notably in the US and Canada, is in the Kraft process for the manufacture of wood pulp. Sodium sulphate is used in the kraft process to digest wood chips. However, this process is being replaced by newer processes; use of sodium sulfate in the US and Canadian pulp industry declined from 1.4 tons per year in 1970 to only approximately 150,000 tons in 2006. Reduced consumption of saltcake by the pulp and paper industry contributed to part of this decline. Of the 120 kraft pulp and paper mills in the US, only about 12 continue to use sodium sulfate in the Kraft pulping process. These mills have switched to using chlorine dioxide for the bleaching process that generates its own byproduct sodium sulfate. Pulp mills have converted to oxygen-based chlorine dioxide because of environmental problems associated with chlorine based bleaching agents, which have been the traditional bleaching compounds used. Glass Industry The glass industry provides another significant application for sodium sulfate, as the second largest application in Europe. Sodium sulfate is used as a fining agent, to help remove small air bubbles from molten glass. It fluxes the glass, and prevents scum formation of the glass melt during refining. Properties of sodium sulfate help speed up the melting process in glassmaking. Its use reduces the tendency for alkaline gas bubbles to form in the glass and provides a less expensive form of Na2O than soda ash. Sodium sulfate improves the working properties of high silica glasses. The glass industry in Europe has been consuming from 1970 to 2006 a stable 110,000 tons annually.

Manufacture of Textiles Sodium sulfate is important in the manufacture of textiles, particularly in Japan, where it is the largest application. Sodium sulfate helps in "levelling", reducing negative charges on fibres so that dyes can penetrate evenly. Unlike the alternative sodium chloride, it does not corrode the stainless steel vessels used in dyeing. This application in Japan and US consumed in 2006 approximately 100,000 tons.

MAJOR EVENTS (2006-2010)

2009 In early 2009, Zeox Corporation, started production at its sodium sulfate deposit near Whiteshore Lake in Palo, Saskatchewan. The Canadian industrial mineral producer had purchased the natural sodium sulfate deposit from Millar Western Industries Ltd. in late 2007. The operation has a production capacity of 100,000 tons per year. The company signed a 10-year contract to supply sodium sulfate to a major potassium sulfate fertilizer producer. 2008 - In late 2007, a major detergent manufacturer in India (Nirma) purchased a California natural sodium sulfate producer (Searles Valley Minerals, a division of Sun Capital Partners). The US ascorbic acid producer, including its byproduct sodium sulfate facility, ceased production in New Jersey. A rayon plant in Tennessee also closed, reducing byproduct sodium sulfate availability. Both facilities had a combined sodium sulfate production capacity of about 71,000 tons per year. 2007 - A California natural sodium sulfate producer (likely Searles Valley Minerals) implemented a $4 per ton energy surcharge on all shipments of sodium sulfate in the third quarter of 2007 due to escalating energy costs. Domestic producers used the New York Mercantile Exchange Henry Hub (connects nine interstate and four intrastate gas pipelines) to base surcharge increases or decreases. Each quarter, the surcharge is fixed using an average of three monthly spot prices taken on the 15th day of the month that precedes the beginning of each quarter. 2006 - Both U.S. and Canadian natural sodium sulfate producers implemented energy surcharges on all shipments of sodium sulfate due to escalating energy costs. Domestic producers used the New York Mercantile Exchange Henry Hub to base surcharges on the 15th day of the month preceding the beginning of each quarter, whereas Canadian natural sodium sulfate operators used the Natural Gas Exchange (AECO) that based quarterly surcharges on the AECO monthly index average for the previous quarter. 2005 - A major chemical company in China and Indonesia completed construction of a natural sodium sulfate plant in Xishunhe, Hongze County, in Jiangsu Province. The facilitys annual capacity was 200,000 tons of anhydrous sodium sulfate. Combined with an existing facility that is a joint venture between a Chinese and Spanish natural sodium sulfate producer, the total annual production capacity in Hongze County was 800,000 tons, establishing that region as the worlds leading sodium sulfate location.

DEMAND
Global market The following pie chart shows world consumption of sodium sulfate: Global demand is expected to exhibit growth of 23% per year in the near future as exports to Central and South America increase to satisfy the expanding use of powdered detergents. A similar growth pattern is also expected in Asia, the Middle East and other developing countries. Growth in developing countries where dry powder is used typically instead of liquid detergents is expected to be above GDP growth levels. Currently, Europe and Asia constitute over 50% of the total consumed market for sodium sulfate. The Chinese market is the worlds largest and is growing at over 3% annually. China has the largest reserves of mirabilite and has been building and expanding capacities to meet global demand. As production costs are relatively lower than in the rest of the world, China has become the major supplier of sodium sulfate for global consumption. Mexico has been a developing market for sodium sulfate lately mostly as a result of demand from the detergent sector. Along with production, exports to South America also grew steadily until 2005. With increasing domestic demand, Mexican exports have been declining and imports have been increasing for the past three to four years. The current market in North America is balanced to slightly tight. With the current economic downturn, there has been an increase in consumption of sodium sulfate in the detergent sector in North America. In early 2009, liquid detergent producers reformulated their products by shifting from 1X concentration to 2X concentration; there were some producers that even went to 3X concentration. This resulted in an increase in dry powder sales as some consumers went back to powdered products feeling that they were getting a better value for their purchase with dry powder than with concentrated liquid detergents. With increasing raw material prices, the need to lower costs to maintain margins has provided an impetus for the increased use of sodium sulfate. This demand is expected to continue, at least in the short term. US Market As shown below, the US market for sodium sulfate has been fairly stable over the past five years. Production has varied between 290,000-320,000 tons per year while consumption has varied between 190,000-280,000 tons per year (therefore the US can produce enough sodium sulfate for their entire market). However, the long term trends are slightly negative as the bulk of sodium sulfate is used in powdered detergents; whereas customers in North America have been shifting towards the use of liquid detergents.

According to the US Geology Survey department, import sources from the US between 2005-2008 are as follows: Canada 79%; Mexico11%; China 4% and others 6%.

SUPPLY
Global Production and Supply Although data on mine production for natural sodium sulfate are not available, total world production of natural sodium sulfate is estimated to be about 4 million tons. Total world production of byproduct sodium sulfate is estimated to be between 1.5 and 2.0 million tons. China is the largest producer and exporter of sodium sulfate. Jiangsu Province is the worlds largest sodium sulfate production base and is expected to produce over 4.8 million metric tons by 2013. In 2003, Lautan Hongze Chemical Industry began commercial production of the worlds largest sodium sulfate plant in Hongze County. Chinas production, consumption, and exports of sodium sulfate have been increasing significantly in the past few years. In 2008, China represented more than three-fourths of the global capacity and more than 70% of the production. In North America, the closure of several plants has helped to eliminate the oversupply situation the sodium sulfate market had faced in the past. Temporary suspensions of operations are also occurring as a reaction to the current global economic downturn. In early 2009, Exide at Baton Rouge announced temporary suspension of operations and Elementis at Castle Hayne declared force majeure because of the shrinking economy. North American demand has been decreasing in both the textile industry because of the entry of cheaper imports and in the detergent industry as the demand for liquid detergents that do not use sodium sulfate increases and demand for powdered detergents that use sodium sulfate decreases. Sodium sulfate resources are sufficient to last hundreds of years at the present rate of world consumption. Countries with significant reserves include the US, Canada, Mexico, Spain, Turkey, Botswana, China, Egypt, Italy, Mongolia, Romania, and South Africa. Commercial production from US resources is from deposits in California and Texas. The brine in Searles Lake, CA, contains about 450 million tons of sodium sulfate resource, representing about 35% of the lakes brine. In Utah, about 12% of the dissolved salts in the Great Salt Lake is sodium sulfate, representing about 400 million tons of resource. An irregular, 21-meter-thick mirabilite deposit is associated with clay beds 4.5 to 9.1 meters below the lake bottom near Promontory Point, UT. Several playa lakes in west Texas contain underground sodium-sulfate-bearing brines and crystalline material. Sodium sulfate also can be obtained as a byproduct from the production of ascorbic acid, battery recycling, boric acid, cellulose, chromium chemicals, lithium carbonate, rayon, resorcinol, and silica pigments. The quantity and availability of byproduct sodium sulfate are dependent on the production capabilities of the primary industries and the sulfate recovery rates. North American Production and Supply The domestic natural sodium sulfate industry consisted of two producers operating two plants, one each in California and Texas. Nine companies operating 11 plants in 9 States

recovered byproduct sodium sulfate from various manufacturing processes or products, including battery reclamation, cellulose, resorcinol, silica pigments, and sodium dichromate. About one-half of the total output was a byproduct of these plants in 2009. Following is a list of the largest North American Producers of Sodium Sulfate (as of 2003). Total production capacity for Mexico and North America is approximately 1.4 million tons with 526,000 tons from Mexico, 213,000 from Canada and the remaining 699,000 tons from the USA.

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CONCLUSIONS
There are several main conclusions that can be drawn from this report: The most common uses for sodium sulfate in the US are: filler for soaps and detergents (35%), glass production (18%) and pulp and paper (15%). Prices are fairly low for sodium sulfate at ~$134 per ton. In the US, production of Na2SO4 has been approximately 300,000 tons per year over the past 5 years with consumption varying between 200,000-280,000 tons. Therefore the US produces more sodium sulfate than necessary and exports the excess product to Asia or South America. However, there are a small amount of imports into the US (40,000-80,000 tons per year) mostly from Canada (~80%) and Mexico (~10%). Capacity for sodium sulfate production in the US is estimated at ~700,000 tons per year. However, as stated above, the US only produces 300,000 tons mostly for its own needs. Therefore US producers are only operating at less than 50% capacity. The trend in demand for Na2SO4 in North America is somewhat negative. The majority of sodium sulfate produced (35%) is used as filler for powdered laundry detergents. However, in North America the use of powdered detergent is declining while the use of liquid detergents (which require no sodium sulfate) is increasing. In 2009, use of liquid detergents is estimated to be as high as 80% of the total detergent market (in the 1990s it was evenly split). The use of sodium sulfate in the North American pulp and paper industry has also declined significantly. Of the original 120 kraft pulp and paper mills in the US, less than 12 continue to use sodium sulfate in the kraft pulping process. The use of Na2SO4 in glass production as a fining agent to remove small air bubbles has stayed relatively stable. Overall global demand is increasing at a rate of 2-3% per year. This is due to increasing demand from developing countries in Asia and South America. Dry powder is used in those countries due to the lower cost. China is the largest consumer and producer of sodium sulfate. In 2008, China represented more than 75% of global capacity and 70% of production. In North America, closure of several plants has helped with the oversupply situation in sodium sulfate.

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