Price trend:

Since mid-October, the domestic sulfuric acid market has entered a period of rapid price increases. According to data monitored by SunSirs, since October 20th, the sulfuric acid market has risen by over 50%, with a 28.7% increase in November alone. The average price of 98% sulfuric acid in the East China market was 967 RMB/ton, with ex-factory prices reaching 1,200 RMB/ton in Jiangsu and Zhejiang provinces, and around 850 RMB/ton in Shandong province. Overall, this was the result of a combination of factors including costs, supply, and market sentiment, with significant differences observed across different production processes and regional markets.

Market Analysis

From the supply side, in November, domestic sulfuric acid plant maintenance involved an annual processing capacity of approximately 21.38 million tons Maintenance was concentrated in the core production areas of Central and East China, and major sulfuric acid producers in Shandong and Liaoning also underwent shutdowns for maintenance, resulting in a significant contraction in regional supply.

From a cost perspective, the surge in sulfur prices was the core driving force, with cost inversions forcing price increases. Sulfur was a key raw material in sulfuric acid production (approximately 0.33 tons of sulfur are consumed to produce 1 ton of sulfuric acid). In November, domestic sulfur prices experienced a significant increase, with the price of imported bulk granular sulfur along the Yangtze River rising by over 10% within the month, and by as much as 120% compared to the beginning of the year. The global sulfur supply landscape had undergone dramatic changes, with export bans imposed due to the Russia-Ukraine conflict and a decrease in exports from Kazakhstan, leading to a widening international supply gap. This, coupled with strengthened pricing power in the Middle East and increased purchasing by countries such as Indonesia and India, has reduced domestic port inventories to 2.2 million tons (below a reasonable level). This cost pressure directly forces a passive increase in sulfuric acid prices; simultaneously, high pyrite prices further strengthen the cost support for sulfuric acid produced from ore.

From the demand side, coastal factories had ample export orders, and some sulfuric acid resources were flowing to the international market, further squeezing domestic supply. Under a tight supply-demand balance, sulfuric acid producers generally had low inventory levels and were even adopting a "limited supply" strategy, providing a basis for price increases. Phosphate fertilizer was the largest downstream consumer of sulfuric acid. Although the operating rate of monoammonium phosphate/diammonium phosphate was only 50%-55%, companies maintained essential purchases during the winter storage period, and some phosphate fertilizer companies were using sulfuric acid to replace high-priced sulfur, boosting demand for metallurgical sulfuric acid.

Regional price differentiation: In Central China, the delivered price of 98% sulfuric acid for smelting increased to 940-1,000 RMB/ton (a monthly increase of over 13%), while the ex-factory price of 98% sulfuric acid from ore in Shandong was 900-940 RMB/ton (a monthly increase of over 12%).  However, due to the concentration of smelting sulfuric acid production capacity in the Northwest and Southwest regions, the price increases there were slightly lower than in the core production areas.

Market Forecast:

Looking ahead, sulfur prices are high and stable, and plant maintenance is still ongoing. Sulfuric acid prices may maintain a stable to slightly upward trend, but downstream resistance is increasing, and government policies may be implemented to control high sulfur prices, so the pace of future price increases is likely to slow down. In the medium to long term, attention should be paid to the recovery of international sulfur supply and the pace of capacity release after the completion of maintenance at sulfuric acid plants.

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