Effective January 1, 2022, ANSAC will implement a natural gas surcharge on all shipments of soda ash to our customers and distributors globally. The amount of the surcharge will be calculated as follows:
- 45 days prior to the beginning of each calendar quarter (or the next business day if the 45th day is not a business day), ANSAC will calculate the forward average of the NYMEX Henry Hub Index for natural gas pricing for the upcoming quarter, as published by the U.S. Energy Information Administration (https://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm), by averaging the forward contract pricing for each month of the upcoming quarter.
- ANSAC will then apply a natural gas surcharge to all sales of soda ash shipments dispatched during the upcoming quarter based on the average forward contract prices for natural gas for the upcoming quarter, using the following schedule:
| NYMEX Henry Hub Index | Soda Ash Surcharge ($/MT) |
|---|---|
| Less tdan $5.00/MMBTU | $0.00 |
| $5.00 – $5.99 | $2.00 |
| $6.00 – $6.99 | $4.00 |
| $7.00 – $7.99 | $6.00 |
| Above $7.99/MMBTU | Surcharge increase by $2.00/MT for each $1.00/MMBTU increment change in the index |
For example, if, on November 17, 2021 (45 days prior to Q1 2022), forward contract prices for natural gas for the months of January, February and March 2022 are $5.40, $5.50, and $5.60, respectively, the average would be $5.50/MMBTU and a Soda Ash Surcharge of $2.00/MT would be applied for shipments dispatched during Q1 2022. You will note that despite the significant recent increase in natural gas prices, no surcharge will be applied so long as natural gas prices remain below $5.00/MMBTU.
We trust that you can understand the need for us to pass through at least a portion of these unprecedented natural gas cost increases. Please contact your ANSAC sales representative should you have any questions.
Very truly yours,
Jeffrey S. Jacobson
President