In May, domestic sulphuric acid prices continued its downward trend. The demand for fertilisers and chemicals which are major downstream industries of sulphuric acid from smelters remained weak. On the supply side, although some smelters have entered into maintenance since May and June, the sluggish downstream demand did not improve.
The maintenance of smelters during the month relieved the pressure on the growth of acid stocks. According to SMM, the sulphuric acid inventory at smelters was high, while downstream demand was weak. Smelters lowered prices to reduce inventories. Ex-factory offers of sulphuric acid in Hubei, Hunan, Jiangxi and Anhui were as low as 0 yuan/mt, and the transportation fees were paid by smelters.
A copper smelter in central China with high inventory of sulphuric acid in May was forced to cut copper cathode output produced with copper concentrate by 20% in May. But its total output did not fall thanks to copper cathode output using anode plates. As sulphuric acid inventory fell, its copper output has recovered to normal levels. On the demand side, June is the off season for fertiliser and the demand for fertiliser remained sluggish. On the whole, the sulphuric acid market is in oversupply, which directly led to the production reduction, suspension or even closure of many domestic manganese sulphate enterprises and fertiliser factories. The operating risks of fertiliser enterprises and chemical enterprises increased.
