Navigating Supply- Demand Fluctuations: Sulphuric Acid Market Faces Turbulence

Antwerp, Belgium: In February 2024, the prices of Sulphuric Acid experienced a fluctuating pattern due to the disruption in the supply and demand equilibrium. The European, as well as the Asian-Pacific region, witnessed a continued decline in the price trend of Sulphuric Acid due to the ongoing Farmers’ Protest and the Lunar New Year holiday season which hampered the supply chain and the production activities.

In the Belgium market, despite the rise in the upstream crude oil market prices, the Sulphuric Acid market witnessed a decline of 6.25% and reached USD 45/MT (FD-Antwerp) in February 2024. This downturn was driven by sluggish demand for Sulphuric Acid from the downstream agrochemical sector and abundant inventory levels. Additionally, ongoing farmer protests in European countries, including Belgium, triggered by government policies promoting organic fertilizers through energy, fertilizer, and transportation price hikes, further impacted the economy and contributed to the Sulphuric Acid market's decline. These protests also played a part in the downward trend observed in the Sulphuric Acid market. Furthermore, the production and use of Sulphuric Acid-based fertilizers can lead to the emission of sulphur dioxide (SO2) and other pollutants, contributing to air pollution, acid rain, and respiratory issues in both humans and animals. Meanwhile, Belgium experienced a significant rise in its annual inflation rate, reaching 3.2% in February 2024. This marks the highest level since August 2023, representing a notable increase from the 1.75% recorded in the previous month.

Similarly, Despite the Lunar New Year holidays and the fewer production days for Sulphuric Acid, the prices of the product continued to decline due to the continuous weak Agrochemical sector along with limited purchases for the fresh purchases. Therefore, the producers kept their production rate for Sulphuric Acid at a lower level to avoid the stockpiling of the product.  In the upstream market, Crude Oil exhibited an upward trend which resulted in the increased energy cost for Sulphuric Acid and adding up to the production cost of the product. Given this market situation, buyers refrained from engaging in procurement activities to avoid potential losses.

However, in the United Arab Emirates market (UAE), in February 2024, the Sulphuric Acid market observed an upward price trend, primarily due to disruptions in the supply-demand balance. Strong demand from the downstream Agrochemical sector led to an increase in consumption rates, causing existing inventories to diminish. Additionally, trading activities from the German market to the UAE market intensified. However, delays in shipments were encountered due to an attack on the Red Sea by the Yemen-based Houthis. This incident necessitated rerouting cargo towards the Cape of Good Hope, leading to logistical challenges and further contributing to the disturbance in the supply chain. Simultaneously, in the upstream market, the prices of Crude Oil witnessed an upswing, leading to heightened energy costs and subsequently elevating the overall production expenses of Sulphuric Acid. However, the prices of its feedstock Sulphur market showcased a declining trend which resulted in slightly lowering the production cost. This bullish market scenario empowered suppliers to elevate their ex-quotations, thereby augmenting their marginal profits.

According to ChemAnalyst, the prices of Sulphuric Acid are anticipated to witness a continuation of the declining trend in the Asian-Pacific region due to the weak Agrochemical sector. However, the prices of Sulphuric Acid in the Middle Eastern market and the European market are expected to increase due to the heightened demand from the downstream Agrochemical sector and the Farmers’ Protest in the European region.