For the Quarter Ending September 2023
In the North American market, the price trend of Sulphuric Acid was slightly increased throughout the third quarter of 2023. Substantial purchasing activities and a healthy demand outlook contributed to the surge in the price trend of Sulphuric Acid along with cost support from the upstream market. The product orders improved from the agrochemical sector, and producers tightened their supplies due to the stressed availability of supplies. At the same time, the demand was steady from the other downstream buyers amid consistent consumption rates from cleaning agents. The restocking practices of fertilizers before the winter sowing season and affected production rates due to hurricane Idalia in late August raised the demand-supply gap in the region. Meanwhile, orders for Di Ammonium phosphate fertilizers increased from Brazil due to the limited supplies from key exporter Morocco after the occurrence of the earthquake on 8th and 14th September 2023. Furthermore, the increase in import prices of feedstock Sulphur amid affected supply chain activities and escalation in upstream Crude Oil prices raised the production costs, resulting in the elevated price trend of the commodity.
The price trend of Sulphuric acid in China declined in the first half of the third quarter and again increased in the second half of the third quarter of 2023. In the first half, sulphuric acid prices have experienced a significant dip. This decline was largely driven by a reduction in demand from downstream fertilizer industries, which increased product inventory levels. As a result, the enthusiasm among downstream customers for purchasing sulphuric acid weakened, contributing to a contraction in the overall market trend for the product in the region amidst a mismatch between supply and demand. Whereas in the second half, the cost support rose due to the increase in feedstock Sulphur prices amid improved demand from the buyers. At the same time, product orders improved from the fertilizer sector, and producers tightened their supplies due to their stressed availability. In the last few weeks of September 2023, due to the arriving Golden Week in October 2023, the trading was done at a higher rate, which resulted in the low availability of vessels and containers, increasing the freight charge.
The market price of Sulphuric Acid in the European Market declined during the third quarter of 2023. In Belgium, the price trend of the product declined in the procurement of sulphur-based fertilizers by the downstream market in Belgium. This dip in demand has resulted in a proportional rise in the quantity of these products held in inventory, possibly attributable to adjustments in farming methods and transforming customer inclinations. However, the price trend was slightly increased with additional cargo trades during August 2023. Providers had their buying exercises on bulk premises with an increase in spot trading activities. In terms of the upstream market, the cost support from the upstream crude oil and Sulphur values surged with the increase in production cost. The Demand for Sulphuric Acid from the downstream Agrochemical and Dyes intermediate market started to surge in the wake of high market offtakes and high trading activities—an uplift in demand to sustain in the European market, which hampered the trading dynamics.
With the end of the third quarter of 2023, the market price of Sulphuric Acid fell from USD 67/MT to USD 48/MT (CFR-Jebel Ali). However, in the first half of the third quarter, the product prices slightly increased due to low stocks and restricted supply in the region, so companies were obliged to raise product prices. When it comes to raw materials, certain manufacturers tend to raise their ex-works prices. This abrupt change in supply and demand dynamics resulted in tremendous market demand and a price increase. Demand for Sulphuric Acid from the downstream Agrochemical and Dyes intermediate sectors continues to be high, with supply surpassing demand. Whereas in the second half of the third quarter, the prices of the product decreased due to low demand from the domestic market for which sufficient inventories were present in the storage units, due to which supplier was obligated to hold their prices. However, surges in the upstream sulphur market were observed, which increased the production cost of the product, but due to the low demand and sufficient inventories, the price trend declined during September 2023.
For the Quarter Ending June 2023
As the second quarter of 2023 came to a close, the market price of Sulphuric Acid fell to USD 76/ton FOB Linden NJ in the North American region. Despite this dip, the Fertilizers and Agricultural Chemicals industry enjoyed a boost of 3.0% just last week, with Corteva leading the charge with a 3.7% increase. Unfortunately, the industry had suffered a significant loss of 7.0% over the previous year. Analysts now project consistent earnings growth in the forthcoming years. The decrease in sales across the board has led to a corresponding reduction in profitability within the industry, causing some concern among investors. Consequently, the inventory level of Sulphuric Acid has risen among merchants according to market data provided by traders. In addition, investors remain skeptical regarding the prospects of the American Energy Industry, casting doubt upon its potential for long-term growth. These factors combined suggest that the outlook for the market remains uncertain. During this week, the supply situation in the USA market continued to outpace the demand, resulting in negotiations by traders at lower prices within the regional market.
Prices of Sulphuric Acid experienced a downturn in the Asian market at USD 78/ton FOB Qingdao during the second quarter of 2023. Market participants appear unfavorable towards the Japanese Fertilizers and Agricultural Chemicals sector, expecting prolonged growth rates to be inferior to historical levels. The industry's current valuation stands at a Price to Earnings (P/E) multiple of 8.8x, below its three-year mean P/E of 13.0x. Meanwhile, the Price to Sales (P/S) ratio remains relatively close to its three-year average of 0.73x. An uptick in the demand for Sulphuric Acid from the downstream fertilizers market contributed to an accumulation of stocks in the region. The Sulphuric Acid demand was weak. A small number of purchases were followed up on demand. The manufacturer's shipment was blocked, and the trading mentality was impacted. Downstream demand continued to be sluggish, market trading was light, Sulphuric Acid manufacturers' shipments were hindered, operators had insufficient mentality and there was a lack of positivity on the market, as the Sulphur market support was insufficient.
The market price of Sulphuric Acid plummeted in the European market at USD 86/ton FOB Hamburg. According to insights shared by manufacturing sources, there has been a substantial fall in demand emanating from the downstream fertilizers and refining segments. Industrial applications are the primary driver behind this diminution, causing markedly less Sulphuric Acid uptake across relevant industries. Consequently, Sulphuric Acid stockpiles are likely to swell among involved traders, owing mainly to subdued demand from consumers at present. It is crucial to observe how industry participants will react to these changing circumstances to make informed decisions moving forward. The inventory level of Sulphuric Acid with the traders and the merchants in the European market as per quotations elevated due to increase in the consumption of the product from the downstream fertilizers stock. According to insights shared by manufacturing sources, there has been a substantial fall in demand emanating from the downstream fertilizers and refining segments. Industrial applications are the primary driver behind this diminution, causing markedly less Sulphuric Acid uptake across relevant industries. Consequently, Sulphuric Acid stockpiles are likely to swell among involved traders, owing mainly to subdued demand from consumers at present. It is crucial to observe how industry participants will react to these changing circumstances to make informed decisions moving forward.
The market price of Sulphuric Acid plunged in the UAE market at USD 71/ton CFR Jebel Ali during the second quarter of 2023. Old fertiliser business was down rapidly over the month, with the rate of expansion hitting a four-year low. The plunge in new orders was driven by weaker customer demand, while the expansion in output was in part due to advertising and promotional activity. In addition, employment fell for the fourteenth month running, however backlogs of work continued to plummet. On the price front, inflation was weaker than the series average, but still the lowest in nearly a year, due to a sharp decrease in purchase prices and staff costs. Lastly, the year-ahead outlook for output remained pessimistic, fallen by the confidence in the continuous fall of new orders. Nonetheless, sentiment dipped from May and remained below the series average as per the market data. In the last week, the Energy Services industry is up 8.6%, with all of the companies up. Despite this gain, the industry's performance has been flat over the past year. As for the next few years, earnings are expected to grow by 16% per annum.
Sulphuric Acid prices de-escalated in the USA market during the first quarter of 2023, with prices ranging at USD 98/ton FOB Linden NJ in March. With rising market inventories and the participation of traders and suppliers, the fertilizers market in the USA de-escalated. Due to increased sulphuric acid stockpiles in the local market, the product's marginal demand fell in the area. Due to lower sales in the USA market region, the revenues from sulfuric acid were depleted. Due to the conflict between supply and demand, the situation in the downstream fertilizer market is dire, consumer interest in buying sulfuric acid is average, and the production trend is downward.
The market value of Sulphuric Acid was depleted in the Asian market, with prices ranging at USD 77/ton IR Grade FOB Qingdao in Q1,2023. The price of the feedstock raw material oleum had an effect on the region's bulk chemical and fertilizer markets. Sulphuric acid inventory levels increased, which had an effect on suppliers' perceptions of the market. The upstream and downstream industrial chains had lately observed a modest slump in the upstream sulphur market due to insufficient cost support. While the downstream market for Ammonium Sulphate saw a slight decline, and product demand from the downstream fertilizer sector fell. The product trend deteriorated as a result of the mismatch between the supply and demand of Sulphuric Acid.
The prices of Sulphuric Acid were de-escalated in the European market, with prices ranging at USD 157/ton IR Grade FOB Hamburg in February during Q1,2023. European exports may benefit from the recent Euro weakening and higher oil prices, but there are still challenges, such as a weaker global economy. As the price of bulk chemicals and fertilizers fluctuated, the market value of sulfuric acid decreased in the German region. With weaker bulk chemical and fertilizer purchases in the area, demand from the downstream fertilizer sector is declining. The product's inventory level tends to rise when sulphuric acid demand declines. The level of competition among the suppliers forced the manufacturers to deplete the prices of the product. The procurement of the product depreciated in the regional market, impacting the market value of Sulphur.