In December 2023, the Hydrochloric Acid market experienced a significant drop in prices in the domestic market, witnessing a decrease of USD 7/MT compared to the previous month. This reflected a 5.6% decrease in the European market. The decline in prices was attributed to multiple factors affecting both upstream and downstream segments of the Hydrochloric Acid industry.

The upstream liquid chlorine market, a key component in Hydrochloric Acid production, faced a slight decline with insufficient cost support. This decline in the upstream market contributed to the overall reduction in the Hydrochloric Acid prices. Manufacturers in the downstream market were also affected as there was a slight decline in demand, and purchasing willingness weakened. Meanwhile, the accumulation of severe inventory by Hydrochloric Acid manufacturers prompted them to lower prices aggressively in an attempt to attract new orders.

The stainless-steel industry, a significant consumer of Hydrochloric Acid, experienced a weakened market throughout the month of December 2023. Poor downstream demand, coupled with a challenging macroeconomic backdrop, led to a decline in the market for finished stainless steel products. In the European market, Hydrochloric Acid companies responded by reducing activity due to continuous drops in new orders. This resulted in cutbacks on input purchases, employment levels, and an overall pessimistic outlook for future business activities. Notably, Germany witnessed a substantial reduction, France experienced a sharper decline, while Italy defied the trend by exhibiting its strongest expansion.

The housing activity in the European region also played a role in weakening the steel market, leading to decreased offtakes of Hydrochloric Acid from steel manufacturing industries. Economic indicators, such as the Eurozone Manufacturing PMI, showed a slight increase in December 2023, surpassing preliminary estimates from the previous month. However, the manufacturing sector remained in contraction for the seventh consecutive month, with ongoing output and job losses. Some positive signs were noted, including improvements in sub-indices such as reductions in new orders and easing purchasing activities. Business confidence reached an eight-month high, but weak demand continued to drive goods producers in the euro area to decrease their stocks.

Looking ahead to 2024, ChemAnalyst predicted an increase in Hydrochloric Acid prices at the start of the new year. This projection was based on the anticipation of increased demand from the automotive, industrial production, and infrastructure sectors, coupled with a decrease in inflation and energy expenses. There is also an expectation that Hydrochloric Acid profit margins could see an improvement in 2024 compared to the low point in 2023, as potential easing of cost pressures and an expected rise in production are anticipated in the coming month.