How long can the hot sulfuric acid market last?

Benefiting from the strong demand in the downstream fertilizer industry and the rapid increase in the price of imported sulfur, the price of sulfuric acid has continued to rise since the second half of 2020, and has accelerated since July this year.
The average price of smelted sulfuric acid in East China has increased from a minimum of 100 yuan/ton in 2020 ( Prices in other regions have mostly fallen to negative values) rose to 800 yuan/ton, reaching the highest level since 2011.
The market is extremely polarized.
For this reason, the author will discuss some views on the current market from the perspective of sulfuric acid supply
.

1.

The domestic sulphuric acid market supply has increased steadily

According to statistics from the China Sulfuric Acid Industry Association, as of 2020, China's sulfuric acid industry has a production capacity of 125 million tons, an output of 98.

59 million tons, and a capacity utilization rate of 79%

According to statistics from the National Bureau of Statistics, China's sulfuric acid production (100% equivalent) from January to July this year was 53.

705 million tons, a cumulative increase of 8.

In terms of smelting acid, domestic copper, lead, zinc, and nickel smelting processes will produce sulfuric acid.

The specific ratio is: 1 ton of copper by-product 3.
5 tons of acid, 1 ton of lead by-product 1 ton of acid, and 1 ton of zinc by-product 2 tons Acid and 1 ton of nickel are by-produced 7 tons of acid (nickel sulfide concentrate)

Therefore, on the whole, the current supply bottleneck of sulfuric acid mainly comes from the decrease in imported sulfur and the increase in the cost of sulfur-based sulphuric acid caused by the high price of imported sulfur
.

　　2.

The downstream acid industry has strong demand

　　Phosphate fertilizer accounts for the largest proportion of the downstream demand for sulfuric acid
.

According to statistics from the China Sulfuric Acid Industry Association, in 2020, in China's sulfuric acid consumption structure, phosphate fertilizers account for 51.
9% of acid consumption, of which monoammonium phosphate and diammonium phosphate account for about 39.
8% of sulfuric acid consumption

　　Since last year, global crop prices have been in an upward cycle, crop planting areas have increased, and the global demand for chemical fertilizers is strong
.

According to relevant research data, the current export price of China's diammonium phosphate has risen to US$620-625/ton FOB; the export price of monoammonium phosphate is US$535-550/ton FOB

　　3.

Outlook

　　1.

The domestic supply of sulfuric acid is expected to continue to increase

　　2.

The pressure on domestic downstream phosphate fertilizer supply will gradually ease
.
Recently, under the influence of policy signals such as the National Development and Reform Commission’s talks with key fertilizer operators and the Market Supervision Bureau’s investigation into fertilizer companies suspected of driving up prices, domestic ammonium phosphate manufacturers have temporarily suspended export orders and will maintain supply and stable prices in the domestic market as current production The top priority of management
.
Therefore, it is expected that with the increase in domestic supply and the increase in the operating rate of phosphate fertilizer enterprises, the domestic phosphate fertilizer supply will gradually be abundant, and the demand for phosphate fertilizer or the peak value will fall during the year
.

　　4.
Relevant suggestions

　　At present, the price of sulfuric acid has risen sharply.
There are imported inflation factors, and the uncoordinated and inadequate structural contradictions between industries caused by the rapid development of upstream and downstream industries for decades are bound to appear
.
In the long run, further restrictions on the use of phosphate and compound fertilizers (chemical fertilizers) in the world will inevitably lead to the shrinking of China’s main acid-using industries, thereby directly reducing demand
.
The urgent need of China's ecological and environmental protection management has promoted the continuous increase of comprehensive recovery of sulfur resources in all walks of life
.
Therefore, the upstream and downstream should proceed from the overall situation of maintaining industrial safety and coordinated development, strengthen the coordination of the upstream and downstream chains of the industry, advocate the construction of a long-term mechanism for upstream and downstream supply and consumption, and strengthen cooperation in industrial development planning and research, industrial structure adjustment suggestions, etc.
, to jointly promote the industry.
Coordinated downstream development
.
(Duan Shaofu, Secretary General of Copper Branch of China Nonferrous Metals Industry Association)

　　Transfer from: China Nonferrous Metals News