US Hydrochloric Acid Prices Surge Over 11% in May 2024 Amid Rising Feedstock Costs
US Hydrochloric Acid Prices Surge Over 11% in May 2024 Amid Rising Feedstock Costs

US Hydrochloric Acid Prices Surge Over 11% in May 2024 Amid Rising Feedstock Costs

  • 12-Jun-2024 3:34 PM
  • Journalist: Jacob Kutchner

In May 2024, Hydrochloric Acid (HCl) prices in the US market surged by over 11%, primarily due to increased feedstock costs. Liquid Chlorine, a key component in HCl production, saw a price increase of 9% this month, directly raising HCl production costs and contributing to the significant price surge in the market. Moreover, this price increase may foster inflationary pressures within the chemical industry and its related sectors. The Producer Price Index (PPI) for Industrial Chemicals increased from 299.9 in March to 307.63 in April, with this upward trend continuing into May 2024. This escalation indicates higher production costs for manufacturers, who subsequently passed these additional expenses onto consumers.

However, the supply and demand for HCl remained stable throughout the period. Supply of HCl in the region remained ample, largely due to a consistent flow of imports from Canada, which sufficiently met the demand for the month. Regional manufacturing units operated efficiently, ensuring stable production levels. Trade reports indicated that US HCl imports from Canada increased by approximately 1.25% in March 2024 compared to February 2024. Moreover, Cydsa, based in Santa Clara, Mexico, temporarily reduced its operational capacity for routine maintenance for 6 days in the mid of the month. Despite this reduction, the supply of HCl across the North American region, including the US market, remained unaffected. The ample availability of HCl imports from Canada and efficient regional manufacturing operations ensured that the market demand was adequately met during this period, preventing any disruptions in supply despite the temporary decrease in Cydsa's production capacity.

Demand for HCl in the US domestic market stayed steady, supported by a resurgence in new orders within the US manufacturing sector during May. This resurgence facilitated a quicker expansion in production midway through the second quarter. Moreover, despite steady prices for HCl, downstream steel rebar, HCl consumption remained strong, bolstered by improved steel production as reported by the American Iron and Steel Institute, Steel production in the last week of May 2024 saw a 0.5% increase from the previous week. However, year-to-date steel production was down by 2.6% compared to the same period last year. Furthermore, US steel mills shipped 7,356,130 net tons in April 2024, marking a 1.9% decline from April 2023. However, shipments increased by 0.2% compared to the previous month, and this upward trend continued into May 2024.

Conclusively, analysts anticipate that HCl prices may decrease in the coming days. This is expected due to a relaxation in feedstock liquid chlorine prices following their significant rise in May. Additionally, importing HCl at lower prices is expected, further contributing to potential price reductions in the coming period.

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