South Korea Faces Record High Prices for Hydrogen Peroxide, No Immediate Relief Foreseen
- 24-Dec-2021 10:24 AM
- Journalist: Jung Hoon
A state of upheaval has gripped the South Korean market as it is witnessing a continued surge in the prices of hydrogen peroxide consecutively for three months. The prices for hydrogen peroxide in December settled at USD 500/MT FOB Busan after registering a 4.1% hike from the average prices assessed in October. The rising trends in the market have been propelled by bullish natural gas feedstock futures.
The demand shocks that permeated the energy sector following the recovery in economies with slackening COVID19-induced restrictions created an acute supply tightness of natural gas in the global market with the onset of the third quarter. Although a slight relief was felt during the second half of November, natural gas once again became the most sought raw material as the winters knocked the door in many countries including South Korea, causing the market traders to struggle for its procurement.
To add to the woes, the latest developments in the European region have propelled the liquified natural gas (LNG) shipment cargoes which had been heading for South Korea, China, and Japan, to turn their course to Europe. Europe which had suffered the maximum wrath of natural gas shortage in the past few months has again become a centre of crisis as the inflow of natural gas from a key Russian pipeline i.e., the Yamal-Europe pipeline, slashed down to the lowest this week. The change in LNG shipments directions has instilled fear among the market participants in Korea who are bound to keep the hydrogen peroxide prices raised. “The high raw material cost is driving up the hydrogen peroxide prices like crazy, and it is expected to soar further in the coming weeks with high demand”, stated a respondent from South Korea’s major chemical and textile company, Taekwang Industry Co. Ltd.
Hydrogen peroxide is a chemical liquid with oxidizing, bleaching and antiseptic properties that enables its wide usage in industries of pulp and paper, health and personal care, food processing, wastewater treatment, chemical synthesis, mining, and metallurgy.
As per ChemAnalyst, the hydrogen peroxide market is feedstock-driven, hence the dangerously increasing natural gas shortage is not expected to give relief to the South Korean hydrogen peroxide prices in the near future. The prices for hydrogen peroxide in early Q1 2022 are likely to inch higher by around 7% as the manufacturers will succumb to making positive revisions in order to sustain profit margin.