Supply: Global and North American lignosulfonate supply will continue to remain tight for the next 2-4 years. In 2019 250,000 metric tons of global lignosulfonate capacity shut down. In 2021 80,000 tons of North American lignosulfonate capacity shut down. In addition, buyers of Russian wood fiber have terminated purchases via sanctions, resulting in the loss of co-product lignosulfonate.
Demand: Global lignosulfonate demand is outstripping supply for all end use markets, all grades and in both liquid and powder form.
North American demand for lignosulfonate as a dispersant and retarder in cement formulations is robust due to the passage of U.S. infrastructure bill, commercial and residential construction and downhole oil drilling.
North American demand for lignosulfonate in the agricultural industry is at record high. The record high prices for corn, soybeans and wheat have agglomeration running at production levels never seen before. Farmers need limestone, gypsum and dolomite pellets to treat the pH of their soil. Farmers are planting additional acreage and petitioning the U.S. Government to reclassify closed acreage, which will only increase lignosulfonate demand further. Record high liquid fertilizer prices have also caused farmers to drop their application of liquid fertilizers and pesticides in favor of impregnated pellets.
The demand for lignosulfonate in dust suppression is strong throughout the U.S. due to the draught. California has reduced their acceptable levels of dust and will fine any commercial operation exceeding the new threshold. When the PNW and MW dust season start this month, more pressure will be put on the North American lignosulfonate supply.
The demand for lignosulfonate as a carbon and ore binder remains strong for carbon black, chemical, fertilizer and energy
production.
Supply Chain: All facets of the lignosulfonate supply chain remain stressed and delayed; vessel, rail and truck.
Pricing: Prices are increasing based on supply and demand, higher raw material cost and fuel surcharge increases.
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The Plaza Group has a comprehensive portfolio of lignosulfonate. We operate a dedicated lignosulfonate rail fleet, multiple rail car transloading facilities, dedicated carriers and a network of warehouses. Our customer service is constantly identified as best in class by our suppliers and customers. Feel free to contact us at 1.800.876.3738, stevewillett@theplazagrp.com, www.theplazagrp.com.