Sulphuric Acid Market Faces the Brunt of High Production Costs Amidst Supply Issues in Europe and Asia

Hamburg, Germany: The Sulphuric Acid market across European and Asian regions is exhibiting a strong upward trend, largely driven by tightening supply conditions and the conclusion of the festive period in China. In Europe, limited spot availability is contributing to the bullish sentiment, while in Asia, particularly in China, market activity has intensified following the end of the holiday week. The combined factors, restricted supply and escalating production expenses are fueling the current upward momentum in the Sulphuric Acid markets across both regions, with participants closely monitoring the evolving dynamics.

The European Sulphuric Acid market witnessed a notable surge of 16.6%, reaching USD 105/MT (FOB-Hamburg) during the week ending on 18 October 2024. This bullish trend is primarily driven by a combination of tight supply conditions and firm feedstock prices. The Sulphur market is maintaining stability at higher levels, adding upward pressure to the downstream Sulphuric Acid prices. Supply constraints continue to be the main driver, with reports of limited spot availability across the region. Market participants are closely monitoring ongoing Q4 contract negotiations, although no confirmed details have emerged yet. The limited supply situation has left buyers uncertain about securing adequate volumes in the near term. Adding to the upward momentum, the demand for Sulphuric Acid has picked up significantly, particularly due to the peak plantation season in Europe, which has fueled consumption in the agricultural sector. The seasonal demand coupled with constrained supply is further tightening the market. As these dynamics unfold, industry players are watching developments in the supply chain and contract negotiations closely, anticipating that the Sulphuric Acid market may continue its upward trajectory in the coming weeks.

The Chinese Sulphuric Acid market is experiencing a bullish trend in the post-Golden Week period, driven by increasing production costs and strong demand during the ongoing peak plantation season. The rise in Sulphuric Acid prices is primarily linked to higher feedstock Sulphur prices, which have surged, elevating the overall production costs for producers. In addition to rising costs, supply-side factors are contributing to the market's bullishness. As China resumes trading after the holiday season, the combined impact of high production costs and limited availability is driving prices upward. Market participants anticipate continued bullishness in the Sulphuric Acid market over the coming weeks.

According to ChemAnalyst, the Sulphuric Acid market in both Europe and China is projected to experience a price increase in the coming weeks, driven by heightened demand and ongoing supply constraints. The combination of limited availability and rising consumption is expected to tighten the market further. In addition, production costs for Sulphuric Acid are forecasted to rise, as the feedstock Sulphur market is likely to see an upward trend. This anticipated surge in raw material costs will contribute to the overall upward pressure on Sulphuric Acid prices across both regions.