The prices of hydrobromic acid in the U.S. softened in May, falling from late April’s values as sellers faced cautious resistance from stock-piling buyers in Q1, who were also wary of new tariffs on Chinese chemicals. The week-over-week drop occurred, while producers of hydrobromic acid kept operating rates steady and feedstock bromine costs remained elevated, although supply was tight for several months.

U.S. customs data indicated that over one hundred importers cleared hydrobromic acid cargoes in the previous twelve months, and China remains the primary source for the 48% grade. Those flows appeared to sharply decelerate in April when the US Administration increased the baseline 10% duty on nearly every Chinese chemical and suggested it was prepared to introduce even harsher import taxes should discussions stall.

Freight forwarders reported that container volumes out of Shanghai destined for Houston declined approximately 60% before negotiators returned to negotiations in Switzerland on 9 May. Though recently, the shipments have begun to increase again in the hopes of a short-term tariff truce. Regardless, chemicals shippers still faced even steeper logistics costs as the proposed port fees of as much as USD 1.5 million for China-built vessels have already increased trans-Pacific spot rates by around 40% year-on-year, an expense that ultimately impacted delivered costs for heavy acids such as hydrobromic acid.

On the demand side, growth continues in the U.S. flame-retardant industry aided by electronics production and constant construction activity. Although expected demand for hydrobromic acid is foreseen to still be dampened by slower volume growth in the same segment, due to unanticipated losses in unit volume in electric vehicle manufacturers this spring.

Pharmaceutical buyers continued to order, however, many conditions on buying in March and April due to the impending 25 % drug-import tariff now being reviewed by the market participants, resulting in light call-offs in May. Generic drug manufacturers who need hydrobromic acid to synthesize several active ingredients remain especially sensitive.

Demand for agrochemicals provided a slight cushion to the hydrobromic acid market. After drought forecasts indicated more fungicide would be used this summer, U.S. pesticide formulators increased imports of brominated intermediates, and domestic blenders kept hydrobromic acid reactors busy by exporting to Latin America.

ChemAnalyst database suggests hydrobromic acid prices will stay flat-to-soft throughout the rest of May and early June. Any applicable uptick in prices will primarily depend upon a couple of factors including whether Washington and Beijing can turn their 90-day tariffs cease-fire into a longer-term deal capable of restoring relatively reliable chemical trade, how swiftly the freight rates turn around once diversion around the Cape of Good Hope subsides, and if U.S. domestic consumption of hydrobromic acid stabilize enough to recover demand.