Persistent Bullish Trends in US and China Sulphuric Acid Markets Amid Tight Supply

Qingdao, China: The US and Chinese Sulphuric Acid markets have been experiencing sustained bullish trends, marked by stability at elevated price levels. This upward momentum is primarily driven by rising production costs, as the price of feedstock Sulphur continues to climb, putting pressure on Sulphuric Acid producers. Additionally, the supply of Sulphuric Acid has tightened, further fueling bullish market sentiments and pushing prices higher. The combination of increased feedstock expenses and constrained availability has created a favorable pricing environment for suppliers. This alignment of cost pressures and supply constraints has contributed to the resilience and strength observed in the Sulphuric Acid markets in both regions.

The Chinese Sulphuric Acid market remains stable at a high price point of USD 55/MT (FOB-Qingdao), during the week ending on 1st November, with continued bullish sentiment due to limited supply. This tightness intensified following the Daye smelter incident on September 14, which led to a minor rebalancing as other producers adjusted to the disruption, though prices continued to reflect reduced availability. Spot supply is particularly constrained, with no significant availability expected until late November or early December. However, stability in the market has been bolstered by steady operating rates for phosphate producers, holding at 50% across key regions like Hubei, Yunnan, and Guizhou. Consequently, suppliers have maintained their price quotations, underscoring the market’s resilience despite supply challenges.

The US Sulphuric Acid market has also demonstrated high-end stability, underpinned by a bullish outlook fueled by significant supply chain disruptions and surging demand from the agrochemical sector. Strikes at Canadian ports, particularly in British Columbia and Montreal, have hindered Sulphuric Acid flow into the US, exacerbating supply constraints. These prolonged labor disputes, which have stalled exports at Vancouver, Canada’s largest port, and blocked substantial container traffic in Montreal, have sparked concern across Canadian industries and governments alike. Further tightening in the US market arises from limited spot availability in the Gulf, where most Sulphuric Acid imports are committed to long-term contracts, restricting flexible supply options. Alongside rising production costs, these logistical challenges have reinforced strong price levels and fostered a cautiously optimistic market outlook in the US.

ChemAnalyst forecasts that Sulphuric Acid spot prices are expected to maintain their current high levels in the near term, driven by persistent global supply constraints. Despite the stable outlook for the coming weeks, a gradual price decline is anticipated as the year-end approaches. This softening may result from anticipated shifts in supply and demand dynamics of Sulphuric Acid, as disrupted supply chains begin to stabilize and meet demand more effectively. However, the timing and extent of this decline will hinge on the rate at which global production recovers and market demand adjusts, particularly from key sectors like agriculture and manufacturing. While prices are expected to ease, the tight supply environment could sustain higher-than-average price levels until a clearer balance between supply and demand is re-established.