China's Sulfuric Acid Industry Report: Output and Consumption Increase, but Overcapacity Is Still Serious   

By Qi Yan, China Sulfuric Acid Industry Association

1. Output grew and product structure changed

In 2010, China's sulfuric acid output hit a record high, reaching 70.33 million tons, up 17.8% year on year, of which the output of sulfur-based sulfuric acid (directly made from sulfur) was 32.98 million tons, up 20.4% year on year, accounting for 46.9% of the total; the output of smelting-based sulfuric acid (produced by the smelting sector) was 19.25 million tons, up 10.0%, accounting for 27.4% of the total; the output of pyrite-based sulfuric acid (made from pyrite) was 17.76 million tons, up 20.8%, accounting for 25.2% of the total; and the output of sulfuric acid made by other ways was 346 000 tons.
   During the "Eleventh Five-Year Program" period (2006-2010), China's sulfuric acid output grew 8.7% annually. Such a rapid growth came from the following aspects. First, due to the rapid development of non-ferrous metal smelting, the output of smelting-based sulfuric acid as a byproduct grew at an average annual growth rate of 14.4%, and its proportion in the total output of sulfuric acid increased by 6 percentage points from 2005 to 2010. Second, in order to support the production of phosphate and compound fertilizers and to meet coastal areas' demand for energy, a number of large-scale sulfuric acid plants were built, making the output of sulfur-based sulfuric acid grow at an annual growth rate of 10.8% and its proportion in the total sulfuric acid output increase by 4 percentage points. Third, with pyrite resource constraints and increasingly stringent environmental requirements, the output of pyrite-based sulfuric acid had an annual growth of only 2.0%, and its proportion in the total sulfuric acid output dropped nearly 10 percentage points during the period.
     
2. Industrial concentration level enhanced

By 2010, in China there were 8 sulfuric acid producers having a capacity of more than 2 million t/a each and 6 producers with a capacity of more than 4 million t/a each. The sulfuric acid output of Hubei and Yunnan provinces exceeded 10 million tons, reaching 11.05 million tons and 10.65 million tons, respectively. Shandong province ranked third, having a sulfuric acid output of 6.03 million tons. The sulfur-to-sulfuric acid capacity is mainly concentrated in two regions: one is the southwestern region, including Yunnan, Hubei, Guizhou, Sichuan provinces and Chongqing, which are high-concentration phosphate and compound fertilizer production bases; and the other is the coastal region, including Jiangsu, Zhejiang and Shandong provinces, where the demand for industrial sulfuric acid is large. Yunnan province had the largest sulfur-based sulfur acid production in China, reaching 7.97 million tons, followed by Hubei province (7.4 million tons) and Guizhou province (5.18 million tons). Gansu province had the largest output of smelting-based sulfuric acid, reaching 2.37 million tons, followed by Anhui province (2.07 million tons) and Yunnan province (2.02 million tons). Hubei province had the largest pyrite-based sulfuric acid output, reaching 3.07 million tons, followed by Anhui province (2.4 million tons) and Guangdong province (2.05 million tons).
   In 2010, there were 464 sulfuric acid producers in China, of which the top 10 accounted for 31.1% of the national total output. Yunnan Yuntianhua Co Ltd (Yuntianhua) was the largest sulfuric acid producer, having an output of 5.16 million tons. 85 sulfuric acid producers each had an output of more than 200 000 tons, accounting for 18.3% of the total number of sulfuric acid producers in China, but their combined output accounted for 70.1% of the national total. 303 sulfuric acid producers each had an output of less than 100 000 tons. Their combined output only accounted for 15.9% of the national total. Some medium and small-sized sulfuric acid plants already reduced or ceased production.
   There were 121 sulfur-to-sulfuric acid enterprises in China, of which the top 10 accounted for 51% of the national total sulfur-to-sulfuric acid output. Yuntianhua was the largest of its kind in China, having an output of 5.16 million tons, followed by Guizhou Kailin Co Ltd (nearly 2.97 million tons) and Hubei Newyangfeng Fertilizer Co Ltd (2.1 million tons). 6 producers each had an output of more than 1 million tons. 45 producers each had an output of above 200 000 tons, accounting for 82.4% of the national total sulfur-to-sulfuric acid output. 47 producers each had an output of less than 100 000 tons, accounting for only 6.1% of the total. The sulfur-to-sulfuric acid sector has basically realized large-scale production.
   The smelting-based sulfuric acid capacity is basically concentrated in large-scale non-ferrous metal smelting enterprises. Among the 125 smelting-based sulfuric acid producers, the top 10 accounted for 48.8% of the national total melting-based sulfuric acid output. Anhui Tongling Nonferrous Metals Co Ltd (Tonglin Nonferrous) was the largest smelting-based sulfuric acid producer of its kind in China, having an output of 2 million tons, followed by Jiangxi Copper Co Ltd (1.8 million tons) and Gansu Jinchuan Group (1.71 million tons). 45 producers each had an output of more than 200 000 tons. Their combined output accounted for 72.5% of the national total smelting-based sulfuric acid output. 83 producers each had an output of less than 100 000 tons. Their combined output accounted for only 15.2% of the total. There are still too many small-scale smelting-based sulfuric acid producers in the country, leading to the insufficient utilization of resources.
   There were 235 pyrite-based sulfuric acid producers in China. They were relatively scattered due to the distribution of pyrite resources. In recent years, as some 400 000 t/a pyrite-to-sulfuric acid plants were built, the top 10 producers accounted for 27.3% of the national total pyrite-based sulfuric acid output. Tongling Chemical Industry Co Ltd was the largest pyrite-based sulfuric acid producer, having an output of 970 000 tons, followed by Tongling Nonferrous (710 000 tons) and Jiangxi Copper (590 000 tons). 16 producers each had an output of more than 200 000 tons. Their combined output accounted for 36.9% of the national total pyrite-based sulfuric acid output, lower than the industrial concentration level of sulfur-based sulfur acid and smelting-based sulfuric acid sectors. 178 producers each had an output of less than 100 000 tons. Their combined output accounted for 36.2% of the national total pyrite-based sulfuric acid output.
   
3. Imports of sulfuric acid and sulfur declined

In 2010, China imported 10.49 million tons of sulfur, down 13.8% year on year, accounting for 37% of the global trade of sulfur. The sources of China's sulfur imports have shifted from North America to West Asia. The imports of sulfur from West Asia further increased and accounted for 41.7% of China's total sulfur imports. The imports of sulfur from Japan, South Korea and Taiwan accounted for 19.6% of the total; Canada and the USA 21.6%; and the former Soviet Union region 16.3%. The average CIF price of sulfur was about US$150 /t in 2010.
   In 2010, China imported 1.61 million tons of sulfuric acid from Japan and South Korea together, down 43% year on year, of which 665 000 tons was from Japan, down 39.3%, and 843 000 tons from South Korea, down 48.5%. In addition, China also imported 100 000 tons of sulfuric acid from Philippines and India. The imports of sulfuric acid from Japan and South Korea were mostly supplied to fertilizer enterprises.
   In 2010, international sulfur prices had a V-shaped movement. In Q1, intern