Sulphuric Acid Market Faces Bearish Trend Amid Stagnation in Energy Prices

During the previous week, the energy industry experienced stagnancy; however, the decrease witnessed in Euronav (a German energy-based company) shares by 3.3% was notable. The energy industry has shown a 13% increase over the past twelve months. However, foreseeable future projections estimate a downturn of 9.9% annually in the earnings of the Belgian energy industries, which further impacted the Sulphuric Acid prices. Analysts consider the long-term growth potential to lag historical averages. Currently, the energy industry trades at a Price Earnings (PE) multiple of 6.8 times which stands higher compared to its three-year mean PE value of -5.7. Correspondingly, the industry's current Price-to-Sales (PS) ratio of 2.3 times is lesser than the three-year mean PS multiple of 3.2 times. However, dwindling demand from the downstream fertilizer sector affected overall market sentiment, and feed Sulfur stock levels remained elevated among traders and merchants.

In Belgium, the market price of Sulphuric Acid fell to USD 76 /tonne of Sulphuric Acid (IR Grade) FD Antwerp in the month of June 2023, while the stored amount increased because of reduced demand from the fertilizer sector. Consequently, the profitability of Sulphuric Acid manufacturing firms deteriorated owing to diminished sales figures leading to dwindling corporate profits. The degree of investors' negativity towards the Oil and Gas Storage and Transportation industry appears better relative to others. Nonetheless, in comparison to other sectors such as fertilizers and chemicals, where financial experts envisage steeper drops of 15.2% and 13.4%, respectively, the estimated drop of 9.9% per year for the Sulphuric Acid Storage and Transportation industry seems milder over the succeeding five years. Nevertheless, despite being lower in magnitude than the fertilizers Industry, the predicted contraction of 2.81% per year in the earnings growth pace of the Sulphuric Acid industry implies a much sharper loss than what the Oil and Gas Storage and Transportation industry could potentially face.

Last month's adjustments to the Sulphuric Acid quotation reflected developments in the global shipping scene influenced primarily by traders. Market supplies of Sulphuric Acid were plentiful but faced limitations on availability in Belgium. Domestic market conditions demonstrated cautious optimism among stakeholders. Winter inventory markets showed poor growth, while the demand for Sulphuric Acid failed to receive adequate backing from purchasers interested in buying Sulphur. Additionally, pressure on domestic refinery inventories did not apply due to constraints in supply and demand, causing equilibrium between these two sides. The market value of Sulphuric Acid has taken a dip due to decreased demand, a significant concern for fertilizer producers. They rely heavily on global Sulphuric Acid market reports and pricing analysis, given its crucial role in the production of Phosphate fertilizer.