Wavering Demand from Steel Sector Continue to Weaken Hydrochloric Acid Prices in China

Hydrochloric Acid (HCl) prices in China have continued to follow a downward trajectory as its demand from the steel segment has been fluctuating in a narrow range ever since the dept crises in the major consuming construction sector.

China’s dept crisis has continued to weigh over offtakes of variety of chemicals going into the construction sector. Hydrochloric Acid pricing altogether drifted by nearly 15% in the whole of Q4. China’s carbon emission targets compelled steel manufacturers to keep the output low amidst Q4. Resurgence of Covid in some global countries made buyers indulge in heavy procurement of products going into the disinfectant segment. Even though there was a marginal surge in its demand from the disinfectant segment in January, it has not been enough to balance the weakness its offtakes from the steel sector. Consequently, HCl enquiries in China witnessed gradual surge for several weeks in January however it again slowed down with stability in virus cases.

HCl prices have again slumped by nearly 10% in China in the second week of February. Since the regional Caustic Soda plants have been operating at optimum efficiency, availability of feedstock Chlorine has remained ample in the near term. As per ChemAnalyst, “HCl prices are expected to continue tracing a downward trajectory as its demand from the steel sector is likely to take several weeks to reach normalcy in China. As China has recently announced a 5-year plan to take account of the growth prospects in the construction sector, long term growth of HCl can be demand favourable.