03 July 2009 17:18 [Source: ICIS news]
LONDON (ICIS news)--Belgian hydrochloric acid (HCl) producer Tessenderlo is seeing the first signs of a pick up in demand for upstream potassium sulphate (SOP) which would hopefully mean production rates can be ramped up improving its HCl supply, a company source said on Friday.
“We’ve started to see a number of enquiries from the fertilizer sector, so possibly fertilizer demand is increasing,” the source said.
In addition, Tessenderlo has recently reduced its prices for SOP in a bid to remain competitive and it was hoped this would also stimulate demand, he said.
No specific prices were stated by Tessenderlo as sales would be dealt with on a customer by customer, and market by market basis.
The decrease came in response to competitor K+S revising its SOP prices downwards.
SOP production has been running at reduced rates since the start of the year due to weak fertilizer demand and this has severely impacted by-product HCl production, the source said, adding that HCl customers had been put on allocation.
While the increased enquiries from the fertilizer sector were a positive movement, the source noted that it was still too early to say how demand would develop and how this would impact SOP and HCl production.
The reduced supplies in Belgium have seen HCl spot prices jump up to €130/tonne ($183/tonne) FD (free delivered), compared to €75-105/tonne FD for contract business, according to global chemical intelligence service ICIS pricing.
Carl Roache contributed to this story
($1 = €0.71)
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