In the week ended 14 August, China's sulphuric acid market continued to drift lower, with the price center moving further down, while weak demand remained the core drag on the market. The SMM China Copper Smelting Acid Index was reported at 1,631 yuan/mt, down 72 yuan/mt WoW, marking the sixth consecutive weekly pullback and a significantly wider decline than in the previous week. This week, prices in Shandong, Shanxi, Sichuan, Yunnan, Hubei and other areas continued to move lower, while only Northeast China and Inner Mongolia held firm due to early-month price adjustments; the market overall still showed no signs of the decline stopping.
Cost side, domestic sulphur prices consolidated on a subdued note this week. SMM sulphur (EXW Shandong) was quoted at 8,650-9,400 yuan/mt on 14 August, averaging 9,025 yuan/mt, down about 115 yuan/mt from last Friday. Cost support loosened at the margin, further weakening the floor support for sulphuric acid.
Core contradiction: demand remained persistently absent, and expectations of a fertiliser demand start-up repeatedly failed to materialise. The market initially expected the start of autumn fertiliser restocking from late July to early August to drive a recovery in sulphuric acid demand, but as of mid-August, downstream phosphate fertiliser producers still showed no clear signs of purchasing. Phosphate fertiliser export restrictions remained in place (MAP and DAP exports were still suspended), the legal inspection policy for ammonium sulphate exports was tightened, and urea exports were subject to quota management. Under multiple policy pressures, overall operating rates in the fertiliser industry stayed low, small and medium-sized enterprises were largely shut down, and only enterprises ensuring supply maintained operating rates of 50%-70%. In addition, demand from downstream sectors such as titanium dioxide, fluorine chemicals and dicalcium phosphate weakened in tandem, and some farmers switched to low-phosphorus, high-nitrogen fertilisers as substitutes, further reducing sulphuric acid consumption.
Supply side: Hongsheng Copper resumed production and released incremental supply, while some smelters began to cut production. On 10 August, Hongsheng Copper officially resumed production. However, at prevailing sulphuric acid price levels, some smelters were already actively reducing operating rates. Maintenance at Jinchuan Group's nickel line would reduce production by more than 2,000 mt/day, potentially leading to some regional supply contraction in the short term, but nationwide, overall supply remained relatively loose. Production cuts provided a marginal buffer, but compared with the pace of demand weakening, they were still insufficient to reverse the overall oversupply.
Regionally, prices in most areas continued to move lower this week, with more significant declines in Shanxi, Shandong, Sichuan, Hubei and other areas, while only Northeast China and Inner Mongolia held firm due to early-month price adjustments.
North China and North-West China: Shanxi EXW prices were cut sharply by 200 yuan/mt to 1,450-1,480 yuan/mt, leading the decline. Gansu was relatively firm (1,700-1,910 yuan/mt). Qinghai offers held steady (1,720-1,740 yuan/mt), but shipment pressure increased somewhat.
East China: Shandong EXW prices fell to 1,400-1,500 yuan/mt, down 160 yuan/mt WoW. Fujian prices, which had fallen more sharply earlier, held steady at 1,580-1,640 yuan/mt this week. Market sources also said that some smelters in Anhui and Jiangxi had begun cutting production to cope with losses.
Central China: Hubei EXW prices held steady this week. Henan quotes were 1,500-1,650 yuan/mt, down 125 yuan/mt WoW; Yuguang Gold and Lead Group lowered its quote to 1,500-1,550 yuan/mt this week. Hunan quotes were 1,600-1,650 yuan/mt, still under pressure from weak downstream demand.
South-West China: Sichuan prices continued to weaken. Hongda's purchase price fell to 1,650 yuan/mt this week (down 150 yuan/mt WoW), and Chengtun Zinc & Germanium is expected to adjust prices further next Monday. Yunnan prices fell to the low end of the national range, with the lowest EXW quote at 1,250 yuan/mt.
Northeast China and Inner Mongolia: Prices remained firm after the early-month increase, and quotes in Chifeng, Liaoning, Jilin and Heilongjiang were stable.
In the international market, SMM sulphuric acid (CFR Indonesia) was quoted at $320-350/mt, with an average price of $335/mt, flat WoW; SMM sulphuric acid (FOB South Korea) was quoted at $310-320/mt, with an average price of $315/mt, flat WoW, while the high-low price spread narrowed. SMM sulphuric acid (EXW DRC) was quoted at $910-960/mt, with an average price of $935/mt, flat WoW; SMM sulphuric acid (EXW Zambia) was quoted at $380-420/mt, with an average price of $400/mt, flat WoW. SMM sulphur (CIF Indonesia) was quoted at $1,050-1,100/mt, with an average price of $1,075/mt, down $25/mt WoW.
Looking ahead, China's sulphuric acid prices are expected to continue to weaken and hit bottom in the near term. On the demand side, the start of autumn fertiliser restocking has been repeatedly delayed, phosphate fertiliser export restrictions are unlikely to be relaxed in the near term, and chemical demand continues to weaken. At current price levels, some high-cost smelters have started cutting production, which may provide some floor support for prices, but the market is unlikely to stabilise until demand recovery signals emerge. In the coming weeks, attention will focus on whether autumn fertiliser restocking can actually start in late August and on changes to phosphate fertiliser export policy.
Key Data This Week:
- SMM China Copper Smelting Acid Index: 1,631 yuan/mt, down 72 yuan/mt WoW (the sixth consecutive weekly pullback)
- SMM Sulphur (EXW Shandong): 9,025 yuan/mt (-115)
- Sulphuric Acid Guidance Price for August: 1,555 yuan/mt
- Shanxi Sulphuric Acid: 1,450-1,480 yuan/mt (-200)
- Shandong Sulphuric Acid: 1,400-1,500 yuan/mt (-160)
- Sichuan Sulphuric Acid (Hongda Purchase Price): 1,650 yuan/mt (-150)
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