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 Q3 2020
Asian spot export sulphuric acid supply continued to tighten in Q3 2020, as downstream domestic demand improved in China, meaning more tonnage was directed into local markets. By the end of Q3, much of Asia’s acid production was tied into forward contracts; with producers in South Korea reportedly sold-out until the end of the year.
Asian acid demand improved marginally in Q3, as the region – particularly China – started to show improved downstream demand from many industries. Some spot tonnage was made available in late-Q3, as traders – some long on positions – deferred or cancelled liftings from South Korea and China.
Supply was stable in Q3, with no reported shortages or outages at producers’ units.
Q3 demand was stable in terms of an otherwise poor year, economically speaking. Domestic demand from acid-consuming industries, which has been weak for much of 2020, started to show signs of improvement in mid-to-late Q3, albeit at a reduced level compared with previous years.
Tight US supply continued on a combination of Kennecott’s smelter outage and continuing power outages from Hurricane Laura. Some facilities are not expecting to have permanent power back online until mid-to-late October. Sulphur output plummeted as a significant amount of refineries shut down for the hurricanes, which further constrained supply in the area.
US supply remained snug, with multiple suppliers receiving spot requests. There was little additional acid to be sold into the market, however. Kennecott’s main customer, Itafos, created additional demand by trying to fulfil its tonnage requirement elsewhere in the market during Kennecott’s extended outage. At least one import deal was heard concluded during the quarter.
Updated to Q4 2020
Sulphuric acid spot supplies for export will remain limited into Q4, owing to stronger call for tonnes in domestic markets. Base metals prices have recovered considerably, meaning more acid will be required to meet local demand from smelters – and subsequently reduced availability for export.
Domestic Asian sulphuric acid demand is likely to be steady in Q4, as producers have locked in much of their tonnage for the year already. Improved downstream demand from China will keep export tonnes light, while Japanese and South Korean producers are similarly set already.
Q4 supply will likely remain stable, albeit at an already-reduced volume, as the delayed effects of the coronavirus pandemic continue. With demand only now improving from many downstream industries, acid producers will likely focus on securing contract sales in Europe, over playing the international spot market.
Demand may increase in Q4. Demand from the automotive and chemical sectors may improve, as restrictions lighten and consumers begin making purchases again. That said, the spectre of a second wave of infections continues to linger.
Kennecott is slated to restart its smelter operations at the beginning of Q4, but regular shipments are not expected until December, keeping supply depleted. With an active hurricane season continuing, depleted sulphur production will likely add to acid tightness during Q4.
Demand was expected for Q4 US Gulf cargoes, but availability is tight and product may come from Asia instead of Europe. Continued demand is expected in California, where SATCO was heard looking for at least two Q4 cargoes.
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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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