China’s Sulphuric Acid Market Maintained Bullish Sentiments Despite Capacity Expansion

Since February end the international commodity market consistently observed gyrations in the market dynamics due to numerous factors that hovering over the global arbitrage currently. The majority of the focus was concentrated on fluctuations in Crude Oil in the international domain after Russia started its special military operations on Ukraine’s territory. That bring heavy and numerous sanctions on Russia and led to the dismemberment of the Russian energy and raw material supplies which levy a direct impact on the commodity trading market. Currently, the world is recovering from the endured losses from the impact of COVID, which showcased a strong recovery in the demand for Crude Oil although the run rates were inadequate to match the current appetite and imbalances in the supply-demand outlook. The byproducts, such as Sulphur and derivatives were one of the major commodity value chains which were proportionally followed the pricing trajectory of Crude Oil.

The conflict in the eastern European regions directed the inquiries traffic to the middle-eastern market which brought severe pressure on the imports of Sulphur from the Middle East to China. Whereas, the Chinese market was also swindling amidst the resurgence of COVID that resulted in the imposition of stricter restrictions by the authorities. The operating rates at the ports were running at 50% capacity and the traffic at the ports was soared by 500% amidst the slower onloading and offloading activities.  Whereas, the demand for Sulphuric Acid is running high amidst the seasonal hype from the fertilizers sector. Although, according to several market sources numerous capacity expansions for Sulphuric Acid were lined up in 2022. According to the stats it plans to increase the capacity by 9.3 million tonnes/year in 2022, and the target is to build a capacity of 21.08 million tonnes/year in which five enterprises are anticipated to expand by 1 million tonnes per year.

As per ChemAnalyst, the supply pattern for Sulphuric Acid was going through several major changes amidst the challenges such as shrinking imports, increasing exports, and significant changes in the arbitrage of goods from the Chinese domestic market. However, the development trend of upstream and doenstream integration of Sulphuric Acid is further prominent.