Market Dynamics

The demand increase in downstream terminals has led to a significant rise in sulfuric acid prices

Time: 2024-03-29 Source from: Titanos

As the "queen of industry," sulfuric acid holds a pivotal position in the commodity market. Since the middle and late February, there has been a significant rebound in sulfuric acid prices, attracting market attention. Data from Zhuochuang shows that as of March 12th, the mainstream daily average price of domestic 98% sulfuric acid was 307.34 yuan/ton, an increase of 39.30% compared to the same period last month. Fang Xiaoying, an analyst at Zhuochuang Information, stated in an interview with the Securities Daily that the recent rapid rise in sulfuric acid prices is related to factors such as reduced market supply, increased downstream production, and speculative buying sentiment. The post-Spring Festival increase in demand from downstream terminals has provided support for the price hike. Looking back, in late July 2023, sulfuric acid prices fell to 152 yuan/ton, hitting a new low since 2010. Subsequently, sulfuric acid prices quickly rebounded, reaching around 330 yuan/ton by the end of September 2023, before falling back to around 220 yuan/ton in early February of this year. Sulfuric acid prices have shown a significant rebound since mid to late February. Since March, domestic sulfuric acid prices have risen by 12.78%.

Ye Yindan, a researcher at the Bank of China Research Institute, stated in an interview with the Securities Daily that sulfuric acid price fluctuations are mainly affected by cost profits and supply-demand relationships. In January and early February, downstream industries such as fertilizers and titanium dioxide were in the off-season for demand, coupled with factors such as restricted transportation during the holidays, leading to a decline in sulfuric acid prices in many areas. Starting in mid to late February, acid manufacturers' inventories were not high, and bullish sentiment returned. In March, affected by the tight supply of raw materials such as copper concentrates, some smelting acid markets experienced a shortage of supply. Meanwhile, the downstream phosphate fertilizer market received strong domestic demand support, leading to active procurement and a general upward trend in sulfuric acid prices.

In Fang Xiaoying's view, in terms of supply, as the second quarter of each year is a period when domestic acid plants undergo concentrated maintenance, some acid plants have started to reserve inventory in advance in preparation for maintenance, leading to an anticipated reduction in market supply. In terms of demand, after the Spring Festival, the operating rate of mainstream downstream enterprises has increased, leading to increased procurement activities. Additionally, under the impetus of speculative buying sentiment, downstream enterprises have shown a relatively strong willingness to purchase, providing support for the rise in sulfuric acid prices.

According to analysis from a certain social system, the domestic sulfuric acid market prices rose slightly last week, with sulfuric acid prices rising from 251.25 yuan/ton at the beginning of the week to 261.25 yuan/ton at the end of the week, an increase of 3.98%, and a year-on-year decrease of 4.42%.

Specifically, sulfuric acid prices from manufacturers such as Heze Jiangyuan and Zouping Tianlu increased by 20 yuan/ton. Meanwhile, prices from Changzhou Qinghong and Changzhou Changjiang remained stable.

In the upstream market, sulfur prices also showed a slight increase. At the beginning of this week, the average price of sulfur was 1026.67 yuan/ton, rising to 1036.67 yuan/ton by the weekend, an increase of 0.97%. Refinery unit operations in Shandong were weak, leading to a reduction in market supply, and downstream procurement enthusiasm was moderate.

In the downstream titanium dioxide market, prices remained at a high consolidation level.

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