Sulphuric Acid Methodology

Sulphuric acid (H2SO4) is a widely used chemical on a global basis. Pure sulphuric acid is a colourless, viscous liquid that can cause severe burns and serious eye and skin damage, and is therefore classified as corrosive or hazardous. Transportation of sulphuric acid requires special stainless steel tanks and vessels and is therefore very expensive. Sulphuric acid is soluble in water at all concentrations.

There are three main types of sulphuric acid, based on the different production methods:

• Sulphur-based sulphuric acid, which involves the burning of sulphur to produce the acid. Around 60% of the total global output of sulphuric acid is manufactured through this process.
• Smelter acid, an involuntary by-product of metal smelting operations.
• Sulphuric acid from pyrites: Pyrite is an iron disulphide and is quarried extensively to produce sulphuric acid. The pyrite is burnt with excess oxygen to produce sulphur trioxide, which will form sulphuric acid when combined with water. Production by this process accounts for less than 10% of annual production and is most common in China.

The main use of sulphuric acid, around 60%, is for the production of phosphate fertilizers where the sulphuric acid is mixed with phosphate rock and other raw materials to produce phosphoric acid. Phosphoric acid is produced when sulphuric acid is manufactured using the ‘wet method’ of manufacturing. Phosphoric acid is then used as a raw material for the production of Diammonium phosphate (DAP), Monoammonium phosphate (MAP) and triple superphosphate (TSP) fertilizers.

Other uses include base metals leaching which requires sulphuric acid and is prevalent in Chile and the Pacific Rim while production of sulphuric acid from base metals smelting is found mostly in Asia and Europe. Industrial uses include the consumption of sulphuric acid for pulp & paper, battery and specialty chemical production.

There are many grades of sulphuric acid available based on concentration, including:

• 20-22%, which contains excess dissolved sulphur trioxide.
• 33% or electrolyte grade, used in car batteries
• 62-70% or chamber acid
• 98% or concentrated sulphuric acid

Frequency:

• ICIS PentaSul quotes Sulphuric Acid prices on a weekly basis worldwide on Fridays in the World Sulphuric Acid Weekly report.
• ICIS PentaSul quotes Sulphuric Acid prices on a monthly basis worldwide during the first week of the month in the World Monthly Review report.
• ICIS Pricing quotes Sulphuric Acid prices on a weekly basis for Asia Pacific on Fridays.

ICIS PentaSul

Weekly Price Assessments:

• CFR US GULF spot (USD/MT)
• CFR TAMPA spot (USD/ST)
• CFR SOUTH US contract (USD/ST)
• CFR NW EUROPE contract (USD and €/MT)
• FOB NW EUROPE spot (USD/MT)
• FOB MEDITERRANEAN spot (USD/MT)
• CFR CHILE contract (USD/MT)
• CFR CHILE spot (USD/MT)

Monthly Price Assessments:

• CFR US GULF spot (USD/MT)
• CFR NW EUROPE contract (USD and €/MT)
• FOB MEDITERRANEAN spot (USD/MT)
• CFR CHILE contract (USD/MT)
• CFR CHILE spot (USD/MT)

ICIS Pricing

Weekly Price Assessments:

• FOB CHINA spot (USD/MT)
• CFR SE ASIA spot (USD/MT)
• CFR INDIA spot (USD/MT)
• CFR NE ASIA contract (USD/MT)
• CFR SE ASIA contract (USD/MT)

General Information:

Assessment window:

ICIS PentaSul price assessments are based on information supplied by market participants through the week up to close of business on Thursdays at 1700 hours in Houston. Prices published in the most recent published issue of World Sulphuric Acid Weekly are used in World Monthly Review. ICIS Pricing price assessments are based on information supplied by market participants through the week up to close of business on Friday at 1800 hours in Singapore.

Specifications:

Prices are generally quoted in metric tonnes (MT) except for: the CFR Tampa and CFR SOUTH US prices which are in short tons (ST). Prices are quoted in USD except for European prices except for the NW Europe contract price which is also quoted in Euros (€).

Timing:

Contract prices quoted on a quarterly or semester basis. Spot prices are typically for cargoes loading prompt (four to six weeks).

Terms:

Prices are usually assessed on a cash basis. ICIS will report about specific credit terms when required.

Standard cargo size:

All cargo sizes are considered from 6,000 to 60,000 tonnes for all FOB and CFR quotes. Cargoes moving from northeast Asia into southeast Asia or intra-southeast Asia are typically 6-12,000 tonnes; cargoes moving from Asia into Chile are 18-20,000 tonnes.

Assessment basis:

Information about new sales, changes to supply/demand and any other factors that can have an impact on the sulphur market is collected through the week up to press time on Friday through telephone calls with producers, end-users, traders and shippers, plus email correspondence and web searching. Information received is carefully counterchecked with other sources to make sure the information is true and accurate and not in any way misleading.

Following are some price specific information:

ICIS PentaSul

Prices refer to most recently concluded contract, spot business or competitive offers. Prices are net of credit or other terms.

Spot prices are changed on confirmed business only – the supplier, consumer or both confirm origin, destination and price.

The Tampa price in US$/short ton delivered consumer tank Bone Valley is based on spot imports. Because of the thin import trade in the Tampa market, a US Gulf price range also is quoted, again for basis spot imports. The South US price series is for domestic industrial business CFR for a medium-to-large industrial consumer by rail or barge.

The NW Europe CFR consumer series represents the contract price range for medium-to-large sized consumers for both vessel and barge delivery within the region. The upper end includes sulphur-based product. This series is shown in €, the currency in which it is agreed and also in USD at the prevailing exchange rate. An overall range is shown as well as a division between quarterly and semester contracts.

The NW Europe export prices are for lots of 10,000 tonnes or larger for export into the international market. The Mediterranean export price is moved whenever the European price is adjusted, keeping a $5/tonne differential reflecting generally higher freights for long-haul destinations. The exception of course is if a specific export out of the Med region is heard, then that price is adjusted and European adjusted by the $5/tonne differential. Mediterranean prices are for export lots of 5,000–10,000 tonnes generally sold by traders into the international market, some of which are for destinations within the region. The prices are based on confirmed deals on the buy or supply side or ideally, both the buyer and supplier confirming business concluded. The spot price is not adjusted to reflect bids/offers which is why it can at times remain unchanged and not necessarily in line with price ideas. Discussion of price ideas is included in the text of reports.

The Chilean price series is for shiploads of 10,000 tonnes or larger landed at a northern (Region ll) terminal in the Mejillones area; spot is the prevailing price for prompt delivery. The contract price is for supply from Chile and Peru negotiated at an annual domestic price.

It is also important to note that there is business concluded in the market that is not reported or confirmed. This can influence price ideas. The ICIS PentaSul prices are intended to be an indication.

ICIS Pricing

The ICIS pricing Asia sulphuric acid report examines trade flows within northeast Asia, and from northeast Asia into southeast Asia, India and Chile. While business to northeast Asia and southeast Asia is covered comprehensively, the report focuses mainly on material originating in China, Japan and Korea as these represent the main export markets for sulphuric acid, although exports ex-Australia and the Philippines will also be reflected periodically in the report.

ICIS pricing Asia sulphuric acid assessments are derived from details of completed business reported during this period. In the absence of concluded business, the range would be assessed on a combination of price indicators including the last-detected transactions, firm bids and offers, buy and sell indications as well as notional discussions.

The report offers market commentary that includes prices in industry sectors related to sulphuric acid, details of traced transactions, news on the supply/demand balance, export/import information, contract price negotiations and general sentiment for price direction. Where applicable, there is production information, comments on up and downstream market developments and general market intelligence.

18th February 2013