In August, the domestic price level for 98% concentrated sulfuric acid trended significantly downward; the monthly average price stood at 1,943.39 RMB/ton, a month-on-month decline of 6.18%. By the end of the month, the average domestic transaction price had retreated to around 1,900 RMB/ton, with the downward momentum accelerating during the middle and latter parts of the month as transaction prices continued to soften across many regions. Regional disparities were pronounced: supplies of smelter-grade acid disrupted the market for sulfur-based acid, as low-priced smelter acid from Shandong flowed into other regions, forcing a downward price adjustment for higher-priced supplies in Central and Southwest China. While the rate of decline narrowed and prices showed slight signs of stabilizing in parts of Shandong toward the end of the month, prices for low-end supplies in the Southwest continued to slide.

Supply side: Maintenance had concluded, supply had increased, and inventories were accumulating.

Units that underwent maintenance earlier in the year resumed production en masse in August, driving up overall operating rates. Meanwhile, the continued release of byproduct acid from non-ferrous metal smelting—available at low prices—has flooded the market, displacing higher-priced acid produced from sulfur. Amid sluggish sales, inventories at acid plants nationwide have gradually accumulated; consequently, enterprises have actively lowered prices to clear stock, making price concessions a common practice to facilitate shipments.

Demand side: The launch of the autumn fertilizer season fell short of expectations, and downstream essential demand remained weak.

Phosphate fertilizers (the largest downstream sector): Stocking for autumn fertilizers was slow to start in August; manufacturers of ammonium phosphates face significant pressure from losses and have limited scope to ramp up operating rates; purchasing is restricted to immediate needs, with no large-scale restocking.

Titanium dioxide, chemicals, and metallurgy: Operating rates across these industries are lackluster; end-users are resistant to high prices—adopting a "buy-on-the-rise, not on-the-fall" mentality—and a wait-and-see attitude prevails.

New energy sectors (hydrometallurgy and lithium iron phosphate) provide only localized support, insufficient to reverse the overall weakness.

Cost and transmission tearing: high sulfur level, but price transmission failure

Raw material sulfur prices remain high, theoretically providing cost support for sulfuric acid; however, severe losses in downstream sectors prevent the pass-through of high acid prices, rendering this cost support ineffective. Market dynamics have shifted from "cost-based pricing" to supply-demand pricing, forcing producers to lower prices to move inventory.

Circulation level: regional arbitrage, price spread elimination.

Low-priced supplies from Shandong are flowing into high-price regions such as Henan, Hubei, and the Southwest; this inter-regional flow is undercutting local high-priced enterprises, driving down the national price level and rapidly narrowing regional price differentials.

Market Outlook:

The prevailing pattern of loose supply and demand in the short term is unlikely to reverse quickly:

If orders for autumn phosphate fertilizers continue to materialize and downstream buyers engage in concentrated restocking, there is potential for a temporary market stabilization and recovery;

In the absence of significant demand growth, high inventory pressure at acid plants persists, making prices more likely to fall than rise;

Fluctuations in sulfur prices remain the key variable determining the cost floor for sulfuric acid, while the volume of smelter acid entering the market dictates the lower bound of the price range.

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