Chemical Profile Sulfuric Acid (virgin)

03 February 2003 00:00  [Source: ICB Americas]

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SULFURIC ACID (virgin)   February 3, 2003

PRODUCER	CAPACITY*
Agrifos, Pasadena, Tex.	550
Agrium, Conda, Idaho	1,240
AK Steel, Middleton, Ohio	5
Akzo Nobel, Axis, Ala.	250
Arch Chemicals, Beaumont, Tex.; Shreveport, La.	560
BP, Texas City, Tex.	350
Cargill Fertilizer, Bartow, Fla.; Riverview, Fla.	4,945
CF Industries, Plant City, Fla.	2,305
ChevronTexaco, Barber's Point, Hawaii	35
Citgo, Lake Charles, La.	140
ConocoPhillips, Lake Charles, La.	70
Cytec Industries, Waggaman, La.	625
DuPont, Darrow, La.; La Port, Tex.; North Bend, Ohio; Richmond, Va.; Wurtland, Ky.	1,485
El Dorado Chemical, El Dorado, Ark.	110
Elementis Pigments, Easton, Pa.	15
General Chemical, Anacortes, Wash.; Augusta, Ga.; Claymont, Del.; Newark, N.J.; Richmond, Calif.	1,315
Honeywell, Hopewell, Va.	430
ICI Americas, Beaumont, Tex.; Belle, W.Va.; Memphis, Tex.	530
IMC Global, Faustina, La.; New Wales, Fla.; Nichols, Fla.; South Pierce, Fla.; Uncle Sam, La.	10,185
J.R. Simplot, Lathrop, Calif.; Pocatello, Idaho	1,500
Kerr-McGee Pigments, Savannah, Ga.	320
Koch Sulfur Products, Rosemont, Minn.	110
Marsulex, Cairo, Ohio; Oregon, Ohio	270
Mississippi Phosphates, Pascagoula, Miss.	1,045
Motiva Enterprises, Deleware City, Del.	210
Ohio Edison, Niles, Ohio	10
PCS Nitrogen, Geismar, La.	500
PCS Phosphate, Aurora, N.C.; White Springs, Fla.	6,970
Peak Sulfur, Riverton, Wyo.; Tulsa, Okla.	140
PVS Chemicals, Chicago; Buffalo, N.Y.	210
Rhodia, Baton Rouge, La.; Baytown, Tex.; Dominguez, Calif.; Hammond, Ind.; Houston; Martinez, Calif.	3,320
Rohm and Haas, Deer Park, Tex.	725
SF Phosphates, Rock Springs, Wyo.	1,190
Southern States Chemical, Savannah, Ga.; Wilmington, N.C.	215
Tampa Electric, Mulberry, Fla.	70
Tesoro Petroleum, Martinez, Calif.	140
U.S. Agri-Chemicals, Ft. Meade, Fla.	1,465
Valero Energy, Dumas, Tex.; Wilmington, Calif.	195
Wheeling-Pittsburgh Steel, Follansbee, W.Va.	30
Total	43,780

*Thousands of short tons per year of sulfuric acid (H2SO4), 100 percent basis, virgin acid from elemental sulfur, acid sludge and stack gas desulfurization. Material produced by fertilizer manufacturers is primarily captive. About 90 percent of the sulfuric acid market is supplied by virgin acid, the remainder coming from smelter production. In January of this year, DuPont announced it would supply Motiva Enterprises LLC's Delaware City, Del., Refinery with sulfuric acid regeneration services by constructing, operating and maintaining a state-of-the-art replacement facility on the refinery's property. The unit's capacity has not been disclosed.Rhodia completed capacity additions at Martinez and Dominguez, Calif., last year, increasing combined capacity of regenerated sulfuric acid by 80,000 tons. In November 2002, Cargill Fertilizer purchased the ammonium phosphate production assets owned by Farmland Hydro, including its sulfuric acid plant in Bartow, Fla., with a rated capacity of 1,900 tons. Farmland Hydro was a limited partnership owned equally between Hydro Agri North America and Farmland Industries. Farmland Industries had filed a Chapter 11 petition last May. General Chemical Group is a division of GenTek Inc. Last October, GenTek filed for reorganization protection under Chapter 11 of the US Bankruptcy Code. PCS Nitrogen and PCS Phosphate are subsidiaries of Potash Corp. of Saskatchewan. In May of last year, Peak Investments LLC purchased two sulfuric acid plants in Tulsa, Okla., and Riverton, Wyo., from Koch Sulfur Products Company. The two plants have a capacity of 130,000 tons annually. In addition to the plants, Peak also acquired terminals in Kansas City, Mo., and Fort Madison, Iowa. The new business unit now operates as Peak Sulfur Inc. At the end of 2001, Valero Energy Corp. acquired Ultramar Diamond Shamrock Corp. with sulfuric acid plants in refineries at Dumas, Tex., (McKee refinery); Wilmington, Calif., and Martinez, Calif. Valero then sold the Martinez refinery to Tesoro Petroleum in May 2002. Chevron and Texaco merged to form ChevronTexaco Corp. in 2001, and in 2002 Conoco and Phillips Petroleum Company merged to become ConocoPhillips. Southern States Chemical Inc. acquired Koch's Wilmington, N.C., sulfuric acid facility, with 65 tons of capacity, in mid-2001. At about the same time, DuPont redeemed its 50 percent interest in Noranda DuPont LLC. The company, a joint venture of DuPont, Noranda Inc. and Falconbridge Limited, was established in 1998 to market, transport and distribute in North America sulfuric acid produced by all three companies. The joint venture was renamed NorFalco LLC. In 2001, Mulberry Phosphates Inc. closed its two plants in Florida at Mulberry (Mulberry Phosphates with 565,000 tons of acid) and Piney Point (Piney Point Phosphates 770,000 tons of acid). The following year, Cargill took over the Mulberry property and uses the plant to process sulfuric acid and to generate electricity for its Bartow, Fla., plant, which is adjacent to the Mulberry property. In 1998, Marsulex Inc. bought Intertrade Holdings Inc., a Copperhill, Tenn.-based sulfuric acid producer, from Trelleborg AB of Sweden. In 2001, Marsulex closed the acid plant, removing roughly 500,000 tons per year of capacity from the market. In May 2001, Agrifos filed for Chapter 11 protection, and, in January 2003, completed a reorganization of its debt. Kerr-McGee Corp. acquired Kemira Oy's titanium dioxide pigment plant in Savannah, Ga., along with its attendant sulfuric acid plant, in April 2000. In 1989, CF Industries Inc. closed its Bartow, Fla., fertilizer producing unit, taking with it 910,000 tons of sulfuric acid capacity. SF Phosphates is a joint venture company owned by Farmland Industries and JR Simplot. Profile last published 1/10/00; this revision 2/3/03.

DEMAND
2001: 44.0 million short tons; 2002: 44.6 million short tons; 2006: 46.2 million short tons, projected. Demand equals production plus imports (2001: 1,522 thousand short tons; 2002: 1,056 thousand short tons) less exports (2001: 230 thousand short tons; 2002: 161 thousand short tons).

GROWTH
Historical (1997-2002): - 1.1 (negative) percent per year; Future: 0.9 percent per year through 2006.

PRICE
Historical (1997-2002): High, $55 per ton, virgin acid, 100 percent basis, tanks, Gulf, works; low, $25 per ton, same basis. Current: $55 per ton to 65 per ton, same basis.

USES

Fertilizers, 70 percent; mining, 9 percent; petroleum alkylation, 6 percent; inorganic chemicals and pigments, 5 percent; pulp and paper, 3 percent; organic chemicals, 1 percent; rubber and plastics, 1 percent; water treatment, 1 percent; miscellaneous, 4 percent.

STRENGTH
The sulfuric acid supply tightened considerably during the second half of last year, placing upward pricing pressure on most markets. Canadian and US smelter capacity curtailment and increased fertilizer operating rates have pushed up sulfur pricing, which, in turn, has raised the price of sulfuric acid. At the same time, the phosphate fertilizer segment, which consumes 70 percent of produced sulfuric acid, has improved. In recent years fertilizer production has been declining, but 2003 should be a turnaround year for phosphate fertilizers. The industrial segments should hold steady, with no appreciable growth or decline.

WEAKNESS
The current market situation is exhibiting unusual characteristics. The merchant sulfuric acid market, which accounts for about 28 percent of demand, has been flat, if not declining, for several years past. Pricing, however, has increased due to supply-side issues of increased sulfur cost for virgin producers and curtailed capacity in smelter acid production. Meanwhile, the improving fertilizer industry-operating rate has put pressure on spot market prices.

OUTLOOK
The sulfuric acid business is benefiting from a tight market with improved prices. This situation should continue, as the economy is anticipated to turn around this year and phosphate fertilizers maintain their recovery. Though sulfur prices for virgin acid producers increased last year due to increased production of phosphate fertilizers, prices have stabilized now with additional imported sulfur, the world's supplies of which remain in surplus. Annual growth for sulfuric acid over the forecasted period is projected to be 0.9 percent per year.

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