Hydrochloric Acid (HCl) prices in the U.S. market are expected to continue an upward trajectory in October 2024, driven by positive demand from downstream industries and restricted inventory levels. The U.S. market outlook indicates a significant increase in HCl prices as the demand from the steel production sector remains robust, coupled with broader supply constraints.

Demand for HCl in October 2024 has remained positive, fueled by steady steel production. According to data from the American Iron and Steel Institute, U.S. domestic raw steel production for the week ending October 26, 2024, reached 1,660,000 net tons, with a capability utilization rate of 74.7 percent. This represents a 1.8 percent increase over the previous week, ending October 19, when production was recorded at 1,631,000 net tons and utilization was at 73.4 percent. However, this is a slight 0.2 percent decline from the same period in 2023, when production stood at 1,664,000 net tons with a 72.4 percent utilization rate. Rising steel production has been a key contributor to heightened HCl demand within the region, supporting a stable, positive market outlook.

This upward trend in HCl demand has also been supported by improved construction activity in October. Despite affordability challenges, home builder confidence saw a slight uptick, with expectations of gradual mortgage rate moderation. Chairman of the National Association of Home Builders (NAHB), noted that builders are cautiously optimistic about easing mortgage rates over the coming months, supporting increased construction activity and, which in turn, boosting HCl demand in related applications.

Moreover, recent movements in the housing market have bolstered the demand outlook for HCl. In September, homebuyers returned to the market following the Federal Reserve’s first interest rate cut in four years, which had a positive effect on new home sales. Sales of newly built single-family homes rose by 4.1% to a seasonally adjusted annual rate of 738,000, based on revised August data from the U.S. Department of Housing and Urban Development and the Census Bureau. Year-over-year, September sales were up by 6.3%, highlighting renewed demand within the housing sector and contributing to HCl’s downstream demand, particularly in construction.

Supply limitations have further supported rising HCl prices, driven by significant disruptions due to recent hurricanes. In early October 2024, Olin Corporation in Charleston, Tennessee, declared a force majeure after Hurricane Helene, leading to an 11-day production halt from October 2 to October 12. This disruption reduced production capacity, creating additional strain on HCl supply levels. These shortages were further compounded by Dow Chemical Company in Plaquemine, Louisiana, and BASF SE in Geismar, Louisiana, which also declared force majeure in September 2024 after hurricane-related impacts, contributing to a 1.25% increase in HCl prices despite limited demand from some downstream sectors.

Additionally, Olin Corporation's Q3 report indicates a 10.1% year-over-year decline in revenue to USD 871.6 million, partially attributed to the impact of hurricanes, including Hurricane Beryl, and ongoing price fluctuations.

In summary, HCl prices in the U.S. are likely to rise in October, as demand remains firm in construction and steel sectors, with limited supply availability further supporting prices. Analysts expect HCl pricing to remain buoyant as positive demand trends persist alongside tight inventory conditions.