The global sulphuric acid markets are covered weekly by ICIS in The Market. The Market gives you the global view on the fertilizer market, and is tailored for the international fertilizers business. The commentary includes supply and demand trends, production news, shipping enquiries, fertilizer prices and price drivers and fluctuations.
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Updated to Q1 2019
Asia
With a large amount of carry-over volumes once again in Japan, and with heavy quantities of South Korean and Chinese material already tendered for 2019 free spot volumes are expected to remain scarce next year. Coupled with this, 2019 will mark a heavy-maintenance schedule in Japan/South Korea, in line with the typical two-year cycle.
On Saturday 15 December, the National Green Tribunal (NGT) found in favour of Sterlite’s appeal against the closure. The NGT declared that decision “unjustified” and “non-sustainable”.
Fresh tonnage from Tuticorin would help relieve supply pressure in the market, although this is not expected to become apparent until the second half of 2019. The impact is expected to be significant enough across the year that India buyers delayed contract discussions while they were awaiting the outcome of the appeal.
Global demand, meanwhile, remains strong – predominantly driven by Chile. Buying interest is expected to remain above spot availability throughout 2019 because of the number of contract commitments agreed in the market.
Sulphuric acid export values were in negative territory – signalling producers were offering money for the removal of product rather than pay storage cost – as recently as 2016, due to it being considered by many manufacturers as a waste product. With sulphuric acid export prices in Japan and South Korea at their highest level on record, Europe and China spot export prices at their highest level since December 2011, it is unsurprising that many producers have been attempting to maximise contract volumes and lock-in material values at their current high levels – leaving lower tonnage available to spot markets in 2019.
Multiple sellers in Asia have committed spot volumes tender, leaving little free tonnage available in 2019. Buyers – particularly in Chile – have been purchasing volume to be distributed throughout 2019 to avoid a repeat of what occurred in 2018.
Europe
European spot supply is expected to remain tight throughout the first half of 2019, in line with global supply patterns and ongoing strong demand. Global availability will in part depend on how quickly Chilean producers are able to adapt plants to comply with new emissions legislation, and when Sterlite’s Tuticorin smelter in India comes back on stream.
Chile is one of the largest importers of sulphuric acid and the expectation of lower domestic production led to a flurry of demand for overseas cargoes from Chilean buyers during the fourth quarter of 2018, amid already tight global availability. Domestic availability is expected to remain low throughout the first quarter. How long tight domestic supply continues beyond that is likely to depend on how quickly plants become compliant with the restrictions.
US
Supply for the first half of 2019 is expected to be constrained in the US due to two separate Kennecott maintenances that are planned. In Canada, Teck’s replacement acid plant at its Trail operations is more than 82% complete and should be commissioned during the second quarter of 2019. So while supply will likely be tight during Q1, additional tonnes may balance things going forward.
With no new major plants expected to come on line for additional consumption during the quarter, demand should remain mostly steady. Global fundamentals of tight supply and higher pricing has kept much of the US market scrambling just to fill its current needs.
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ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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Sulphuric acid is a strong mineral acid with a wide range of uses in industry. 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.
A key use of sulphuric acid is for the production of fertilizers. Other uses include the production of carbon disulphide, sulphur dioxide and phosphorous pentasulphide; pulp and paper; and rubber vulcanising. Sulphuric acid can also be used in its diluted form as battery acid for the automotive sector.
Sulphuric acid is colourless in appearance and of an oily liquid consistency. It is both corrosive and toxic and has the ability to cause serious burns. In addition, it is harmful through inhalation, ingestion and through skin contact.
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