Demand Disruption Causes Volatility in Saudi Arabian and US Sulphuric Acid Markets
- 29-Nov-2023 3:34 PM
- Journalist: Nicholas Seifield
Jeddah, Saudi Arabia: The price of Sulphuric Acid is experiencing an increase in the Saudi Arabian market since the demand from downstream agrochemical enterprises has improved. However, in the USA, the prices of Sulphuric Acid continued to follow the same stable trend as the previous week, along with the consistent demand rising from the downstream agrochemical enterprises, keeping all the other relatable factors constant.
After following the muted trading fundamentals, the Sulphuric Acid in Saudi Arabia follows an upward price trend and showcases bullishness in the market. With the week ending on 24th November, the price of Sulphuric Acid elevated to USD 59/MT (Ex-Jeddah). Due to an increase in demand from the downstream Agrochemical market, producers are ramping up production rates to meet the needs of the domestic market. Recognizing this opportunity, traders elevated their quotations to capitalize on the situation by securing profit margins alongside increased sales. However, the upstream Sulphur market is still maintaining its stability, keeping the operating cost intact, but since the demand is increasing, the prices for Sulphuric Acid have witnessed a rise in price trajectory. In terms of spread, the difference between the Sulphuric Acid and its feedstock, Sulphur, is rising, securing the profit sales among the ventures. The demand recovery from the downstream enterprises persists, and the suppliers are trading their cargo, anticipating further hikes in the price trend.
In the North American market, the prices for Sulphuric Acid remain steady at the lower end, showcasing the bearishness in the market. The stability in demand from the downstream Agrochemical enterprises is prompting consistent purchasing activities from buyers to meet the existing demand. There were no major disruptions in the supply/demand scenario, and the trades were flat, providing a cap on the price fluctuations. Market participants are ensuring a reliable and uninterrupted supply of commodities among major manufacturing units. Additionally, supporting the prices for Sulphuric Acid was its feedstock, as the prices of Sulphur are steady as well, leading to consistency in the operating costs. Nevertheless, consistent demand for the commodity from the domestic market provides price stability. The overall stability is attributed to storage units that the end users are consuming, resulting in the constant restocking of sulphuric acid and contributing to a moderate trade.
According to ChemAnalyst, the price trend for Sulphuric Acid in the global market may increase in the upcoming weeks in the wake of a rise in product utilization and crippling product availability. The incline in demand from the downstream sector will be attributed to the rise in commodity consumption in the crop season, providing the tightness for sulphuric acid. This may increase the rate of consumption of Sulphuric Acid from the storage facilities by the end users, which may result in the enhancement of the trading activities.