Soda Ash Royalty Reduction Legislation Critical to U.S. Exports
September 16, 2015
Senators John Barrasso (R-WY), Ron Wyden (D-OR), Mike Enzi (R-WY) and Jeff Merkley (D-OR) Introduce Legislation to Support U.S. Soda Ash Industry.
Bipartisan legislation introduced on September 15, 2015, by Senators John Barrasso (R-WY), Mike Enzi (R-WY), Ron Wyden (D-OR), and Jeff Merkley (D-OR) will continue to help ensure the health of the U.S. soda ash industry in the face of mounting competition from China and overseas competitors. If passed, the American Soda Ash Competitiveness Act will temporarily reduce for five years the royalty rate on the output of sodium compounds on federal land to 2%, which includes soda ash.
The U.S. soda ash industry would benefit from the reduced rate, helping U.S. soda ash to stay competitive in an export market increasingly distorted by China's industrial and economic policies. Most recently, China's 4.4% devaluation in its currency, the yuan (CNY), has led to an unfair promotion of China's synthetic soda ash exports at an artificially lower price. Furthermore, the Chinese Government continues to provide a rebate of its VAT for its soda ash exporters to the detriment of U.S. exporters.
"In the face of fierce and unfair foreign competition in the Asian market from China, the reduced royalty rate provides crucial support to the U.S. soda ash industry. Now, more than ever, our U.S. soda ash producers are relying on strong export markets," said Chris Douville, president of ANSAC. "A five-year extension would provide U.S. soda ash producers more certainty in the face of increased competition from China."
Soda ash is a basic chemical commodity used in the manufacture of glass and detergents, in agriculture, and in healthcare. The U.S. exported $1.3 billion of soda ash in 2014, 32% of which was bound for markets in Asia.
ANSAC, headquartered in Westport, Connecticut, is the international marketing arm for three U.S. soda ash manufacturers: Tronox Alkali Wyoming Corporation, OCI Chemical Corporation, and Tata Chemicals Partners.