For the week ending July 17, the China sulphuric acid market broke the previously stagnant pattern at highs, with prices generally declining. The SMM China copper smelting acid index was reported at 1,763 yuan/mt, down 21.5 yuan/mt WoW. EXW prices in Shandong, Fujian, and Jiangxi saw declines of 100-155 yuan/mt, while only a few regions such as Sichuan held steady with slight increases. The consolidation at highs observed over several consecutive weeks was broken, and the market entered a downward adjustment phase of “cost support versus weak demand.”
From the cost side, domestic sulphur prices remained at highs this week. SMM sulphur (EXW Shandong) was quoted at 8,907-9,600 yuan/mt on July 17, with an average price of 9,253.5 yuan/mt. Total sulphur port inventory nationwide was about 750,000 mt, up WoW, mainly due to increased arrivals but slow downstream cargo pick-up, with overall inventory remaining at extremely low levels for the past three years. Sulphur prices stabilizing at highs still provided some support to the cost side of sulphuric acid, but weakening downstream demand dominated the price trend this week.
From a driving factor perspective, the core logic behind this round of price declines was: First, the concentrated resumption of production from previously maintained units. Smelting acid units that had been under maintenance in regions such as Shandong and Henan had largely resumed production, releasing incremental supply. The previous logic of “maintenance-driven price hikes” no longer held, and downstream resistance to high prices quickly intensified. Second, phosphate fertiliser demand entered a lull. After the spring fertiliser demand peak from January to May ended, the demand cycle from June to December had just begun, and downstream phosphate fertiliser enterprises significantly slowed their procurement pace. Third, the cross-regional impact of low-priced cargo. Regional price spreads were squeezed, triggering a chain reaction of price cuts.
In terms of regional performance, the areas with price declines expanded significantly this week. EXW prices in Shandong, Fujian, and Jiangxi all experienced varying degrees of decline, while only Sichuan and a few other regions remained stable with slight gains.
Shandong EXW prices fell by 155 yuan/mt to 1,700-1,930 yuan/mt. In the Yingkou area, low operating rates in downstream magnesium sulphate and fertiliser industries led to inventory backlogs, causing low-priced cargo to flow into the Shandong market, which dragged down prices in Shandong.
Fujian EXW prices dropped 150 yuan/mt to 1,650-1,750 yuan/mt, dragged down by weakening market conditions for downstream caprolactam and LFP, which led to significant contraction in regional demand. Enterprises faced increased selling pressure, and prices fell under pressure. This further affected neighbouring areas, resulting in Jiangxi EXW prices dropping 100 yuan/mt to 1,670-1,770 yuan/mt.
Anhui remained stable at 1,830-1,880 yuan/mt, Guangxi remained stable at 1,780-1,900 yuan/mt, Yunnan remained stable at 1,640-1,700 yuan/mt, Hubei remained stable at 1,600-1,700 yuan/mt, Hunan remained stable at 1,650-1,850 yuan/mt, Henan remained stable at 1,700-1,800 yuan/mt. Sichuan held steady this week at 1,580-1,720 yuan/mt, with some enterprises edging up their prices.
North-east China, Inner Mongolia remained stable at 1,430-1,700 yuan/mt. Looking ahead, maintenance at some smelters may push prices higher, but due to low acceptance of high prices by downstream users, the increase is expected to be limited. Liaoning remained stable at 1,650-1,750 yuan/mt, Jilin remained stable at 1,800-1,900 yuan/mt, Heilongjiang remained stable at 1,700-1,850 yuan/mt.
North-west China, Gansu remained stable at 1,750-1,910 yuan/mt, Qinghai remained stable at 1,820-1,840 yuan/mt, Xinjiang remained stable at 1,400-1,600 yuan/mt. In Shaanxi, Hanzhong Zinc Industry Co., Ltd. quoted 1,850-1,900 yuan/mt this week.
On the international market, SMM sulphuric acid (CFR Indonesia) was assessed at $310-380/mt, averaging $345/mt, flat MoM; SMM sulphuric acid (FOB South Korea) was assessed at $360-370/mt, averaging $365/mt, flat MoM. SMM sulphur (CIF Indonesia) was assessed at $1,100-1,200/mt, averaging $1,150/mt, flat MoM. In the African copper belt, SMM sulphur (DAP DRC) was assessed at $1,800-1,850/mt, and SMM sulphur (DDP DRC) at $2,100-2,300/mt, both flat MoM.
Looking ahead, China’s sulphuric acid prices are expected to remain in the doldrums in the near term. The release of supply growth from production resumptions of previously maintenance-hit units, coupled with a demand vacuum for phosphate fertilisers and sluggish chemical demand, will keep downward pressure on prices in the short term. However, sulphur costs fluctuating at highs and maintenance curbs in some regions will limit the price decline. Enterprises generally believe that prices are already at elevated levels for the current phase, downstream acceptance of high prices is limited, and the market will consolidate within a range.
Key Data Summary for This Week:
- SMM China Copper Smelting Acid Index: 1,763 yuan/mt, down 21.5 yuan/mt MoM
- SMM Sulphur (EXW Shandong) Average Price: 9,253.5 yuan/mt (17 Jul)
- Shandong Sulphuric Acid: 1,700-1,930 yuan/mt (MoM -155)
- Fujian Sulphuric Acid: 1,650-1,750 yuan/mt (MoM -150)
- Jiangxi Sulphuric Acid: 1,670-1,770 yuan/mt (MoM -100)
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