China sulphuric acid market weakness persists, price center continues to decline [SMM Sulphuric Acid Weekly Review]

       For the week ending August 21, the China sulphuric acid market continued its weak run, with the price center edging lower. Persistent weak demand remains the core contradiction weighing on the market. SMM China copper smelting acid index was reported at 1,595.5 yuan/mt, down 35.5 yuan/mt from last Friday, marking the seventh consecutive week of pullback, and the market has yet to show signs of stop falling.

       Regionally, most areas saw prices continue to edg lower this week, with Anhui and Yunnan posting the largest declines.

       East China: Impacted by persistent weakness in external markets and poor downstream demand in the region, leading acid producers in Anhui lowered quotes yesterday to 1,455-1,505 yuan/mt. In Shandong, transactions are mostly negotiated on a case-by-case basis, with the transaction price center already falling to 1,400-1,500 yuan/mt; there have been reports of shipments at 1,100 yuan/mt. Fujian, which saw larger declines earlier, remained stable this week at 1,580-1,640 yuan/mt. Jiangxi is currently quoting 1,590-1,740 yuan/mt.

       South-west China: Schuan prices continue to weaken, currently quoting 1,340-1,600 yuan/mt. Yunnan prices have fallen to the low end of the national range, as downstream demand for calcium hydrogen phosphate and titanium dioxide remains sluggish; the current transaction center is around 1,320 yuan/mt.

       Central China: Quotes are relatively stable with relavely small fluctuations. Henan quotes 1,500-1,550 yuan/mt, and Hunan quotes 1,550-1,630 yuan/mt.

       North-west and North China: Shanxi EXW prices remain stable at 1,450-1,480 yuan/mt. Gansu is relatively firmer (1,700-1,910 yuan/mt), with only Baohui lowering quotes under influence from Schuan prices.

       North-east China and Inner Mongolia: Prices remained firm after increases at the beginning of the month, with Chifeng, Liaoning, Jilin, and Heilongjiang stable.

       On the international front, prices are relatively stable. SMM sulphuric acid (CFR Indonesia) was quoted at 320-350 $/mt, with an average of 335 $/ mt, flat WoW; SMM sulphuric acid (FOB South Korea) last week was quoted at 310-320 $/mt, average 315 $/ mt. SMM sulphuric acid (EXW DRC) was quoted at 910-960 $/ mt, average 935 $/ mt, flat WoW; SMM sulphuric acid (EXW Zambia) was quoted at 380-420 $/ mt, average 400 $/ mt, flat WoW. SMM sulphur (CIF Indonesia) quoted at 1,050-1,100 $/mt on August 21; average 1,075 $/ mt.

       On the sulphur side, China sulphur market saw limited transactions this week, with prices continuing to drift lower. On August 21, SMM sulphur (EXW Shandong) was quoted at 8,407-9,500 yuan/mt, with the average down 71.5 yuan/mt from last Friday.

       Looking ahead, China sulphuric acid prices are expected to continue their weak hit-bottom pattern in the short term. On the demand side, the start of autumn fertilizer stockpiling is being postponed repeatedly; phosphorus fertiliser export restrictions are unlikely to ease in the near term (policy direction after the August 31 expiry remains unclear); and chemical demand continues to weaken. At current price levels, some high-cost smelters have started to cut production, which may provide some bottom support for prices. However, until signs of demand recovery appear, it is difficult to say the market has stabilized. Going forward, attention should focus on whether autumn fertilizer stockpiling can materially start in late August and any changes in phosphorus fertiliser export policies.