In 2023, the domestic sulfuric acid market saw a sharp rise and fall

According to the Commodity Market Analysis System of Business Society, the domestic sulfuric acid market will experience a sharp rise and fall in 2023. The average price at the beginning of the year was 286.67 yuan/ton, and the average price at the end of the year was 274 yuan/ton, a decrease of 4.42% for the whole year. From the trend chart of sulfuric acid prices, it can be seen that the highest price of sulfuric acid in 2023 was 316 yuan/ton in mid September, and the lowest price was 152 yuan/ton in late July, with a maximum annual amplitude of 107.89%.

From the monthly K-bar chart, it can be seen that in 2023, the price of sulfuric acid has fallen more or risen less, and the market situation has experienced significant ups and downs. The highest increase was 83.75% in August, and the highest decrease was 19.19% in January. In January, the downward trend at the end of 2022 continued, with sulfuric acid prices continuing to decline by 19.19%. The use of spring plowing fertilizers in March provided support for the price of sulfuric acid, with an increase of 15.82%. With the end of spring plowing, the production of phosphate fertilizer enterprises continues to decline, coupled with a significant drop in upstream sulfur prices, sulfuric acid prices continue to decline. In April, the price of sulfuric acid decreased by 9.03%, and in May, the price of sulfuric acid plummeted by 16.64%. In June, the export orders for sulfuric acid increased, and the price of sulfuric acid increased by 7.69%. Entering the third quarter, the demand for autumn fertilizer market began to increase, and the price of sulfuric acid market rapidly increased. The price increased from 152 yuan/ton at the end of July to 306 yuan/ton at the end of September, an increase of 101.32%. Entering the fourth quarter, the price of sulfuric acid fluctuated widely with the rise and fall of upstream sulfur. In October, sulfur prices fell by 8.52%, while sulfuric acid prices fell by 15.69%. In November, sulfur prices surged by 13.07% and sulfuric acid prices surged by 17.05%. Downstream demand weakened in December, and sulfuric acid prices began to decline again.

How will the sulfuric acid market develop in 2024?

In terms of production capacity, as of September 2023, China’s sulfuric acid production capacity is about 139 million tons, with a growth rate of 4%, and the scale of production capacity is steadily expanding. According to data statistics, a total of 30.4 million tons/year of newly built and planned sulfuric acid production capacity will be built in China from 2023 to 2025. From January to October 2023, 5.35 million tons/year of sulfuric acid production capacity will be put into operation, of which 3.4 million tons/year of sulfuric acid production capacity will be commercial, and 1.95 million tons/year of sulfuric acid production capacity will be self used. In 2024, a total of 10.55 million tons/year of sulfuric acid production capacity is planned to be put into operation, of which 7.33 million tons/year of sulfuric acid production capacity is planned for commercial use, and 3.22 million tons/year of sulfuric acid production capacity is planned for self use. The trend of overcapacity in sulfuric acid production is becoming more severe.

From a supply perspective, as of November 2023, the national sulfuric acid production reached 86.802 million tons, a year-on-year increase of 2.8%. It is expected that in 2024, driven by the steady expansion of production capacity, sulfuric acid production will gradually increase, and supply pressure will further increase.

From the perspective of market demand, the top three downstream consumption proportions of sulfuric acid are diammonium phosphate accounting for 30%, monoammonium phosphate accounting for 21%, and titanium dioxide accounting for 12%. The production capacity utilization rate of downstream products such as phosphate compound fertilizer and titanium dioxide is showing a downward trend, and various downstream market trends are showing a sluggish trend.

From the perspective of imports and exports, the cumulative export volume of sulfuric acid in China from January to November 2023 was 2.2419 million tons, a year-on-year decrease of 34.73%. The cumulative import volume of sulfuric acid in China from January to November was 310600 tons, an increase of 16.46% year-on-year. At present, there are 7 domestic sulfuric acid export enterprises, and the pressure on sulfuric acid supply is increasing. The number of sulfuric acid export enterprises may continue to increase in 2024.

Overall, the sulfuric acid market will continue to face downward pressure from oversupply in 2024.