China sulphuric acid index falls for nine consecutive weeks with a widening decline; domestic sulphur trade rebounds from lows, while sulphuric acid outside China stops falling and stabilizes [SMM Sulphuric Acid Weekly Review]

       For the week ended September 4, the domestic sulphuric acid market remained weak. The SMM China copper smelting acid index stood at 1,539.5 yuan/mt, down 44 yuan/mt from last Friday (1,583.5 yuan/mt), with the decline widening notably from the previous week (-12 yuan/mt). This marked the ninth consecutive weekly pullback since the week of July 10 and a new low since August. In contrast to the accelerating search for a bottom in China, overseas markets showed signs of stabilising this week: the Asian markets that had led the decline (CFR Indonesia, FOB South Korea) were flat this week after the "step-down" at end-August, while high prices in the African copper belt have been unchanged for a month. On the sulphur side, domestic EXW Shandong prices rebounded from lows this week after a sharp drop in late August, sending an initial signal of stabilisation on the cost side.

       Regional divergences widened this week: Yunnan bucked the trend with a 30 yuan/mt increase to steady the market, east China along the Yangtze (Anhui, Jiangxi, Shandong) mainly followed the downtrend, some enterprises in Guangxi cut prices by 50-100 yuan/mt, Heilongjiang made a catch-up cut of 120 yuan/mt, and most other regions held steady. Overall, a divergence is emerging within the sulphuric acid chain—"weak domestic reality persisting while overseas and LME markets stabilise at the margin"—and confirmation of a domestic bottom still awaits a demand-side follow-through.

       Regional performance

       East China: This week east China mainly followed the downtrend, with notable cuts in Jiangxi and Anhui, a slight downward shift in the Fujian price center, and a counter-trend rise in Shandong's price center due to outflows of cargoes. EXW prices in the Tongling area of Anhui were lowered to 1,400-1,450 yuan/mt (vs 1,455-1,505 yuan/mt last week), mainly because of low fertiliser operating rates and sluggish smelting acid sales; maintenance at a large local smelter is still ongoing, and the supply reduction has materialised but has yet to provide price support. Major acid producers in Jiangxi made concentrated cuts of 50-140 yuan/mt this week, clearly following the downtrend. EXW prices in Fujian were 1,580-1,600 yuan/mt, with the average price down 20 yuan MoM and wait-and-see sentiment prevailing. In Shandong, the price range was 1,440-1,550 yuan/mt, with high-end prices up 50 yuan WoW.

       South-west China: Divergence emerged within the south-west this week—Yunnan raised prices against the trend, Guangxi followed the downtrend, and Sichuan edged down slightly. Leading enterprises in Yunnan raised prices by 30 yuan/mt from September 1, with a clear intention to steady the market. EXW prices in Sichuan were 1,320-1,450 yuan/mt, with the average price down 10 yuan MoM. Some smelters in Guangxi cut prices by 50-100 yuan/mt, mainly due to synchronous declines in surrounding areas; a local smelter plans maintenance in October, which may disrupt regional supply going forward.

       Central China: This week central China was largely stable, with some areas taking the lead in price adjustments. Smelters in the Daye area of Hubei took the lead with a 50 yuan/mt cut last Friday (August 28), a reduction that surrounding enterprises such as those in Tongling, Anhui have regarded as the starting point of this round of price cuts along the Yangtze, with Anhui and Jiangxi following suit this week. EXW prices in Hunan were 1,400-1,500 yuan/mt, with the average price down 75 yuan. Low acid prices continued to squeeze smelting margins.

       North-west and north China: This week the north-west and north China were largely stable, with no concentrated price adjustments. EXW prices in Shanxi were 1,380-1,420 yuan/mt, flat MoM, holding steady after earlier catch-down moves; attention remains on the movement of low-priced cargoes from Shandong. EXW quotes in Gansu were 1,700-1,910 yuan/mt, remaining the highest in the country, with no price changes during the week; regional supply-demand balance is intact and shipments are smooth. A large copper smelter in Qinghai maintained prices at around 1,630 yuan/mt following the August 26 adjustment, reporting moderate sales volumes and stable operations after the price change took effect. Quotes in Xinjiang were around 1,500 yuan/mt, with enterprises reporting essentially no changes and limited inventory pressure.

       North-east China and Inner Mongolia: Divergence emerged within the north-east this week: Heilongjiang cut prices, Jilin was in the doldrums, and Liaoning and Chifeng were largely stable. Acid prices in Heilongjiang were cut by 120 yuan/mt, with the reduction previously expected by the market materialising this week. Jilin was in the doldrums: quotes remained at 2,400 yuan/mt, with enterprises reporting high costs and essentially unchanged prices, while some areas cut prices by 80-120 yuan/mt. Quotes in Liaoning were maintained at 1,580-1,800 yuan/mt; the phased impact of maintenance at a major magnesium fertiliser consumer on regional demand remains to be seen. Quotes in Chifeng, Inner Mongolia were 1,510-1,610 yuan/mt, with mainstream EXW quotes unchanged and some enterprises cutting prices to traders by 100 yuan/mt.

       International sulphuric acid prices stopped falling and were flat across the board this week, with Asian markets stabilising after earlier declines and the African market holding at high levels. SMM sulphuric acid CFR Indonesia: $305-325/mt, averaging $315/mt, flat WoW. SMM sulphuric acid FOB South Korea: $300-320/mt, averaging $310/mt, flat WoW. SMM sulphuric acid EXW DRC: $910-960/mt, averaging $935/mt, flat MoM, unchanged for five consecutive weeks since August, with the local supply gap persisting and prices holding at global highs. SMM sulphuric acid EXW Zambia: $380-420/mt, averaging $400/mt, flat MoM, unchanged for five consecutive weeks since August.

       On the sulphur side, prices rebounded from lows after a rapid and sharp decline in late August. SMM sulphur (EXW Shandong) mainstream transaction prices were 7,450-8,500 yuan/mt, averaging 7,975 yuan/mt, up 575 yuan/mt from last week (6,900-7,900 yuan/mt, averaging 7,400 yuan/mt), a weekly gain of about 7.8%. Low-end transactions improved and market sentiment recovered.

       Looking ahead: In the short term, the weak search for a bottom in domestic sulphuric acid is unlikely to change, and attention remains on how phosphate fertiliser export-related policies are implemented after the August 31 deadline and on fertiliser stocking progress. National sulphuric acid prices next week are expected to consolidate on a weak note and gradually search for a bottom, with the decline likely narrowing from this week.