Global Sulphuric Acid Prices Face Bearish Trends Amidst feeble Market Dynamics

Jeddah, Saudi Arabia: During the week ending on 15 December 2023, the global market price of Sulphuric Acid is showcasing a bearish trend. In the Saudi Arabian market, Sulphuric Acid continues to follow a stable price trend compared with the previous week due to the consistent and manageable demand from the downstream Agrochemical and Textile enterprises. Whereas, in the North American market, the prices of Sulphuric Acid are following a downward trend because of the accumulation of the existing inventories among the storage facilities restricting further trading activities among the significant manufacturing industries.

In the Saudi Arabian market, the prices continue to follow their stability from the previous week at USD 60/MT (Ex-Jeddah), on 15th December 2023. However, its upstream Sulphur market is experiencing a decline in its price trend due to the continuation of the loss in the prices of crude oil, contributing to the low production cost for Sulphuric Acid. The demand from the downstream Agrochemical and Textile enterprises is moderate and manageable since the supply/demand equilibrium is maintained. Due to several factors including the smooth trading activities from the Chinese market to the Saudi Arabian market along with sufficient inventories and simultaneous restocking of the Sulphuric Acid. Traders, noting the market conditions for the commodity, are opting to keep their quotations unchanged to ensure a smooth running of the supply chain for the Sulphuric Acid. Likewise, suppliers are retaining their Ex-quotations, and buyers are also maintaining their purchasing activities in line with the prevailing market conditions for the commodity.

Nevertheless, in the North American market, the prices of Sulphuric Acid are trailing a downward trend due to the decreased demand from the downstream Agrochemical and Textile industries. Although, the price of the upstream Sulphur market is following a steady trend, maintaining consistency in the production cost for Sulphuric Acid. However, due to the ample existing inventories, the market of Sulphuric Acid is facing loss. Taking the bearishness of the Sulphuric acid market into consideration, the traders are lowering their quotations even at the cost of squeezing their marginal profits.

To persuade the buyers to enhance their purchasing activities, the traders are providing buyers with a discount on bulk purchases. Nevertheless, buyers are cautiously purchasing the commodity on the immediate basis with slow demand recovery from the end-users. One of the factors for the declining price trend is a crucial destocking process, as the traders are trying to consume their inventories by the end of December 2023, so that the upcoming fresh stock can be adjusted. Talking about the spread, the difference between the Sulphuric Acid and its feedstock, Sulphur, narrowed representing the bearishness in the market situation for the commodity.

As per ChemAnalyst, it is anticipated that the prices of Sulphuric Acid may showcase and incline in its trend in the upcoming weeks. OPEC+ announced in a statement that the reductions would commence on January 1 and extend until the conclusion of March 2024. This may increase the cost of its upstream Sulphur market resulting in an increased overall production cost for Sulphuric Acid. It is also anticipated that the market trades from China to the Asia and Middle-East may further improve with an uptick in the purchasing appetite from the buyers.