US Gulf sulphuric acid rises $5/tonne on sulphur, Europe market

21 February 2014 23:20 Source:ICIS News

HOUSTON (ICIS)--Prices for sulphuric acid spot tonnes in the US Gulf have increased by $5/tonne, as assessed by ICIS on Friday.

Prices are at $35-45/tonne CFR (cost and freight) in the Gulf, where they were at in November 2013. The market is no longer as long as it was in December and there has not been the length from Europe that was seen previously.

The rise reflects a $35/long ton ($34/tonne) DEL (delivered) increase in sulphur price for US Tampa Q1 contracts that lead to a $10.50 increase in acid contracts based on the sulphur index. It also accounts for decreased availability from Europe, where the market is seen as balanced.

The effect has been that imported acid in the low-$30s is no longer seen in the market.

Gulf sulphuric acid spot prices did not rise immediately with the sulphur settlement as the contract price did, but have ticked up as sulphur prices have continued rising around the world. However, domestic prices are fragmented, with smelter acid heard flat after the sulphur settlement.

The ample supply in the North American acid market has meant that smelters have not achieved the increases seen in sulphur.

The Q2 sulphur price is a major point of discussion. Source have said that a small increase or roll over could lead to a bear market for the rest of 2014, while a large increase would lock in the increases burners have been able to get.

The South US Consumer price range is still heard representative at $85-135/ton ($77-122/tonne) CFR (cost and freight). Sulphur burners have been heard to have successfully raised their contract rates with the sulphur increase. There is debate over whether there is still product in the $80s, and it is heard to be unlikely to find a contract at that level.

Meanwhile, no maintenance is expected until late spring

Sulphuric acid is derived from smelters as well as elemental sulphur. Traded sulphuric acid is primarily by-product smelter acid.

Sulphuric acid from elemental sulphur, produced as an involuntary product from oil and gas exploration, is largely used in fertilizer manufacturing and metal ore processing.

Others end-uses include oil refining, wastewater processing, pulp and paper production, lead battery acid manufacturing, nylon production and chemical synthesis.

By David Tonyan