Hydrochloric Acid Market Rebounds as European Manufacturers Raise Prices Amidst Material Shortage

Europe: Several Hydrochloric Acid manufacturers in Germany have sought higher prices for their products due to increased costs and reduced availability caused by production cuts. A resurgence in demand has supported this price increase as buyers have returned to purchasing Hydrochloric Acid, driven by low stock levels and the need for material towards the end of the year. Transaction levels have increased by USD 2/MT, with the current value hovering at USD 105/MT FOB Hamburg during the month of October 2023.

The substantial production cuts implemented by mills across Europe are the key factors influencing this market shift. Although demand for Hydrochloric Acid from the steel industry remained sluggish, distributors needed to replenish their stocks, which they had been avoiding in the previous month. The current price rise was not primarily driven by economic conditions or end-user steel consumption but rather by the production cuts that have made this price recovery possible. Hydrochloric Acid manufacturers have found it necessary to increase Hydrochloric Acid prices to cover their rising production costs.

One of the driving forces behind the increasing demand for Hydrochloric Acid was the consistent growth in procurement from the European steel industry, which has been grappling with rising feedstock costs and production cuts. The region has had high procurement activity as businesses seek to cover their first-quarter needs after almost two months of material shortages. Despite the price hikes, customers have largely accepted them, understanding the challenges faced by manufacturers. The Hydrochloric Acid producers have remained resolute in their pricing strategy, believing that lowering prices would not stimulate consumption. However, the market dynamics, influenced by production cuts and restocking demands, have supported the acceptance of these price increases.

In the meantime, other European markets, including France, the Netherlands, and the UK, have also experienced the impact of rising production costs, leading to increased import prices for Hydrochloric Acid. Importers have pointed out that due to insufficient product availability, restocking, even at higher prices, has become a necessity. Consequently, import prices have also seen an increase in October 2023.

According to data from ChemAnalyst, the current price for Hydrochloric Acid may fluctuate due to the European market's uncertain demand. The significant restocking activity in the current period could potentially lead to an oversupply situation if demand doesn't meet expectations. Therefore, it is hard to predict the situation for the next month. However, analysts anticipate that the price of Hydrochloric Acid will likely rise, particularly considering the high demand from the steel manufacturing industries during the seasonal construction period.