Hydrochloric Acid Prices to Remain Volatile as Subdued Consumption from Steel Sector Extend Woes

Hydrochloric Acid prices, after falling for several weeks in the month of November, have finally begun to revive owing to the marginal increase in offtakes from the downstream buyers. However, the recovery is unlikely to last for too long as the hovering concern over steel consumption is likely to dull purchases from buyers in the coming months.

Hydrochloric Acid (HCl) is widely utilized as a pickling agent in steel sector. Steel sector in China is one of the most crucial sectors however there has been an astonishing fall in the output towards the end of the year as a spillover effect of the slowdown in construction activities. It has been heard that property developers in China have been facing a debt situation which is making them to temporarily halt the construction. As Hydrochloric acid consumption is sensitive to the ebbs and flows in the steel sector, its prices have become highly volatile in the past few months.

In the previous quarter Hydrochloric Acid price majorly mimicked the movement in the steel sector. As per ChemAnalyst data, Hydrochloric Acid prices in China showcased steep rebound by nearly 30% in the previous quarter. However, the surge in its prices was normalized within a month due to the sudden drop in steel consumption.

Contrary to the market movement, enquiries for Hydrochloric Acid have increased in the last few weeks of December due to a slight change in sentiments as several buyers tend to stockpile products at lower prices toward the end of the year, and then sell them at elevated prices in January to extend their profit margins. But the foresighted view is still under huge stress due to the prevailing concerns over the construction sector in China which is likely to send ripples to other commodities output as well.