China’s sulfuric acid market has experienced a strong rally following the National Day holiday, with prices rising significantly across multiple regions including Shandong, Jiangsu, Zhejiang, Anhui, Hubei, Hunan, Guangdong, Guangxi, Yunnan, and Jiangxi. Market activity has been brisk, with acid plants maintaining low inventory levels and smooth shipments. This upward trend is primarily driven by robust cost support from raw materials and a substantial contraction in supply.
Raw Materials: Surging Sulfur Prices Set the Foundation for Increase
The continuous and sharp rise in sulfur prices has been the core driver of this round of sulfuric acid market gains. Tight supply in the international sulfur market, coupled with factors such as high freight costs, has kept import costs elevated. Spurred by international markets and relatively low port inventory levels, domestic spot sulfur prices have shown significant increases. Meanwhile, prices for pyrite and metal ores such as copper, lead, and zinc have remained firm. The high-cost pressure from raw materials has provided solid support for the rise in sulfuric acid prices.
Supply Side: Frequent Plant Turnarounds Lead to Regional Tightness
After the holiday, numerous acid plants across China entered maintenance periods, leading to a noticeable contraction in market supply. In Anhui province, some units at major producers and several sulfur-based acid plants underwent maintenance, with additional production cuts at other facilities. Sulfuric acid units in Jiangxi were shut down for repairs, as were some units at key producers in Dongying, Shandong. In Hubei, numerous downstream captive sulfur-based acid units were idled for maintenance, and some plants in Hunan also underwent shutdowns. The overall operating rate in the market has declined significantly, and with supply tightening, the impetus for price hikes remains strong.
Demand Side: Mainly Routine Procurement, Overall Performance Tepid
In contrast, demand performance has been disappointing. The major downstream phosphate fertilizer sector has entered its traditional off-season, with fertilizer plant operating rates declining, leading to mainly routine procurement of sulfuric acid. Chemical sector demand is also relatively weak, with products like caprolactam and titanium dioxide showing lukewarm performance, resulting in steady to slightly weaker demand for sulfuric acid.
As of press time, the mainstream ex-factory price for 98% smelter acid in Shandong is around 500-620 yuan/ton. In Jiangsu, the mainstream ex-factory price for 98% sulfur-based acid is approximately 740-850 yuan/ton. In Anhui, the mainstream market price for 98% smelter acid is around 640-670 yuan/ton, while the mainstream ex-factory price for 98% sulfur-based acid is about 810-900 yuan/ton. In Hubei, the mainstream delivered price for 98% smelter acid is near 630-740 yuan/ton.
In summary, the October rally in the sulfuric acid market is a rational response to the combined effects of cost push and supply reduction. Under the current dynamic of “strong raw materials and tight supply,” the sulfuric acid market is expected to maintain its strength in the short term. Close attention is advised on upstream raw material trends, maintenance schedules at major acid plants, and the sustainability of downstream demand changes.
