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US Hydrochloric Acid Market Sees Upward Trend Amid Fluctuating Demand
US Hydrochloric Acid Market Sees Upward Trend Amid Fluctuating Demand

US Hydrochloric Acid Market Sees Upward Trend Amid Fluctuating Demand

  • 08-Mar-2024 4:43 PM
  • Journalist: Patricia Jose Perez

Texas (USA): The US market for Hydrochloric Acid (HCl) has seen an upward trajectory, influenced by factors linked to the price of its feedstock. There have been varied indications of demand for HCl in recent months, largely due to fluctuations in demand from the steel industry. Nonetheless, the pricing of HCl in the US witnessed an incline during February 2024, a trend that market participants anticipate continuing in the upcoming weeks.

In February 2024, the price of HCl increased by 9% in the US market, supported by rising prices of liquid Chlorine, which surged by 11.2%. The US market for liquid chlorine has been steadily increasing since July 2023, creating a complex scenario for the HCl market. However, the HCl market has remained adaptable, accommodating downstream demand. Since the beginning of 2024, the US HCl market has been on the rise, primarily due to higher production costs. The price of HCl is significantly influenced by the cost of its upstream feedstock. The surge in HCl prices can be attributed to the complexity in liquid chlorine production, driven by the cost support from the energy sector, as energy in the form of LPG and Electricity plays a crucial role in the Chlor Alkali Process. Fluctuations in energy costs have further complicated the situation for HCl cost, which has erupted due to geopolitical issues.

Furthermore, a key downstream of HCl, steel rebar (reinforcing bar), saw minimal growth during the month, increasing by just 0.1%. Nucor Corporation, a leading steel manufacturer in the USA, reported a decline in net sales by 12% in the fourth quarter of 2023 compared to the third quarter. International exports of downstream steel products also decreased by 11% in the same period, with overall operating rates at the company's steel mills dropping to 74% in the fourth quarter of 2023 from 77% in the third quarter. The slowdown in construction activity has been attributed to various factors, including a 4.7% drop in single-family housing in January due to extreme cold weather across much of the country. Additionally, rising mortgage rates have discouraged potential buyers, leading to a slowdown in housing demand and consequently, a decrease in construction activity.

In conclusion, the US HCl market is experiencing conflicting signals from the upstream, feedstock segment. Currently, ChemAnalyst forecasts that the price of HCl may remain relatively soft, supported by feedstock prices, with the potential for an increase after improvements in the steel manufacturing industry and construction activities.

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