Sulphuric Acid Shortages Hit Downstream Sectors In India

The Sulphuric Acid market has been observed to rise in the Indian market. The conflict between Russia and Ukraine severely impacts Sulfuric Acid prices in the Indian domestic market. Soaring international crude oil prices have accelerated the cost of manufacturing upstream sulfuric acid raw materials. Demand in Sulphuric acid attributable to the growing pharmaceutical and infrastructural developments in the regional market which drive the cost of sulphuric acid. The cost pressure from upstream has strengthened.

In addition, Sulphuric Acid is one of the major materials used in many major industries in India. Especially in Tamil Nadu, the supply in the state has gradually decreased significantly in recent years, adversely affecting downstream industries such as fertilizers, pharmaceuticals, detergents, papermaking, and pulp makers. Due to the closure of certain industries in the state, the supply of Sulphuric Acid in the state is in short supply and the production of Sulphuric Acid in the region has to be stopped. This shortage of supply in Tamil Nadu has increased the cost of Sulphuric Acid in India, forcing them to import their needs from different countries. As Sulphuric Acid imports increase, local market prices will rise steadily.

In addition, there are three more Sulphuric Acid production plants in India, but most of the products from these three plants are used for captive use, forcing downstream industries to continue importing.

The primary use of Sulphuric Acid is in producing fertilizers such as superphosphate of lime and ammonium sulphate. Indian officials have signed an agreement with Jordan Phosphate Mining Company (JPMC) and Arab Potash Company (APC) to enhance the cooperation in the fertilizer sector.

As per Chem Analyst, the upstream cost pressure is strengthened owing to the regional international crude oil prices hike. The increased energy prices will mostly put much pressure on downstream industries in India and raise the prices of various chemical commodities manufactured in India.