For the Quarter Ending June 2021
Hydrochloric Acid (HCl) prices remained firm during this quarter in North America, backed by tight supply and improving demand from the downstream sectors. Due to the extreme shortage of Chlorine in the US after prolonged shutdown of major Chlor-Alkali units, the price of almost all Chlorine derivatives increased rapidly in USA. In addition, Westlake Chemicals announced force majeure at its Washington plant during first half of June, this plant has the capacity of 75 KTPA of Chlor-alkali production. The shut down reduced the supply of several chemicals including Hydrochloric Acid, Caustic Soda and Chlorine in USA.
Hydrochloric Acid prices fluctuated in a narrow range in the APAC region, due to abundant inventory levels amidst modest to firm demand. The demand for HCl remained modest in China from the downstream sectors, while the availability remained abundant to satisfy the overall need. Meanwhile, Kamira announced to increase its production capacity for Sodium hypochlorite and Polyaluminum Chloride, where HCl is the key ingredient in the manufacturing process. The expansion will inevitably increase the demand for Hydrochloric Acid in the country although most of the company’s demand can be satisfied by the captive production. While in India, the prices traversed a steep downward trajectory during this period, due to lacklustre buying demand in effect of pandemic in the country and ample inventory levels. Thus, price dwindled effectively and reached USD 34.5/MT during June in India.
The European Hydrochloric Acid (HCl) market remained stable during this quarter. The demand showcased decent rise throughout the quarter while availability remained fairly tight to hold on the price uptrend. Downstream sectors like PVC and steel were showing firm sentiments, while feedstock Chorine was running on shortage in the meantime. The circumstances supported overall increase in the offers of Hydrochloric Acid across the region during this quarter in the region. In addition, prices of feedstock chemicals also increased due to shipment delays and soaring freight cost.
For the Quarter Ending March 2021
Continuous shortage of the feedstock chemicals and halted production activities forced the prices of HCl to rise aggressively across the region. Multiple hurricanes during Q4 2020, had already created acute shortage of HCl but during Q1 2021, devastating winter storms disrupted all the production activities again. Winter storm led major plants to go for force majeures in mid-February like Olin Corporation’s freeport Texas units. Similarly, several other HCl and feedstock chemical plants shut down due to this rare climate calamity, leading to rise in average FOB prices by more than 30% within the quarter, which settled down at USD 420 per MT during March 2021.
The Asian HCl market showed mixed sentiments during the quarter. Lunar holidays in China reduced the inventory levels of major Chinese manufacturers, hence the prices followed an upward trend during Q1 2021. FOB prices for China rose from USD 245 per MT to USD 280 per MT from January to March. While in the Indian market, an opposite price trend was observed, where the average price of HCl (33% grade) dwindle by 10% due to ample stock availability and reduced demand from downstream sector.
Demand for HCl from the downstream sectors marked a downtrend during Q1 2021. One of the key reasons was lower downstream consumption amid rising in COVID 19 cases across the region. There was slight rise in demand from the steel manufacturing sector due to marginal sectoral improvement across the region, which was too backed by the government policies. Thus, the prices faced marginal loss during this time space, like FOB prices for HCl in Germany were observed to reduce from USD 115 per MT to USD 113 per MT from January to March 2021.
For the Quarter Ending September 2020
The European region encountered HCl supply shortage in Q3 2020 due to disintegration of upstream isocyanate facilities across several locations. Offers were raised after Covestro and BASF declared shutdowns at their isocyanate facilities in August. Demand patterns, especially in Iberia were not too high amid limited sectoral offtakes from the metalworking and automobile industries. Consumption by the downstream industries such as water purification also remained weaker because the tourism industry was facing dents induced by the travel restrictions. The NWE (northwest Europe) Hydrochloric Acid prices registered 10 per cent increment on month-on-month basis extending gains due to production issues, a market source revealed.
Supply of HCl fell substantially in Q3 2020 in the Americas as manufacturers reduced production rates due to a major slump in demand of other Chlor-Alkali products. During the quarter ending September, acid demand from the oil and gas industries was pressured due to restricted use in the applications of hydraulic and fracturing process as the auto industry slowly began to revive from the pandemic blows. HCl contracts registered marked QoQ fall, weighed under the limited requirement of the car fuel and undue delays in the start of steel industries after coronavirus-led restrictions and seasonal storms triggered trade disruptions.