China's Sulfuric Acid Market Was Positive in 2011   

By Qi Yan, China Sulfuric Acid Industry Association

1. Production and consumption grew steadily
According to the National Bureau of Statistics data, in the first eleven months of 2011, China's sulfuric acid output reached 68.52 million tons, up 6.2% year on year (yoy). In terms of raw material route, the output of sulfuric acid made from sulfur was 31.95 million tons, accounting for 46.6% of the total output, up 5.2% yoy; sulfuric acid made from smelting byproducts 19.76 million tons, 28.8% of the total, up 7.1% yoy; sulfuric acid made from minerals 16.61 million tons, 24.2% of the total, up 24.2% yoy; and sulfuric acid made from other routes 200 000 tons. The average monthly output of sulfuric acid in China in 2011 reached 6.23 million tons, increasing by nearly 1 million tons compared with that in 2010.
   The output growth of sulfuric acid mainly came from the following sources: 1) Driven by the growth of non-ferrous metals production, the output of sulfuric acid as a byproduct of copper, lead, zinc and nickel smelting increased; 2) several sulfur-based sulfuric acid units as supporting facilities of a few large new phosphate fertilizer plants were put into production, leading to a substantial increase in the output of sulfuric acid made from sulfur; 3) the output of sulfuric acid made from pyrite increased sharply as the steel industry's demand for iron ore grew.
   Last year, China's demand for sulfuric acid increased steadily, mainly driven by the output growth of downstream products, such as high-concentration compound fertilizer, titanium dioxide, hydrofluoric acid, caprolactam, citric acid, iron and steel and textiles.

2. Raw material sulfur prices soared
In 2011, international sulfur supply was a little tight. From January to November, sulfur FOB prices at Port of Vancouver climbed from US$170 /t up to US$245/t, and sulfur FOB prices in the Middle East rose from US$160 /t to US$220 /t. Sulfur CIF prices in China rose from US$160 /t to US$ 239 /t, increasing by nearly US$80 /t. The average sulfur CIF price in China grew 77% from January to November.
   In the first eleven months of last year, domestic sulfur prices in coastal areas always stayed above RMB1 850 /t, and the ex-factory price of sulfur at Puguang gas field rose to RMB1 790 /t. But by December, with the decline of international and domestic demand, sulfur prices came down slightly, and the ex-factory price of Puguang sulfur dropped to RMB1 700 /t.

3. Sulfuric acid prices stayed at high levels
In 2011, sulfuric acid prices in China basically were above RMB550 /t. While the demand for sulfuric acid was vigorous in peak seasons, sulfuric acid prices were set based on sulfur prices. As sulfur CIF prices were up to US$239 /t and domestic sulfur prices reached RMB1 850 - 1 900 /t , sulfuric acid prices in North China, East China and Southwest China climbed to RMB650 - 700 /t. In December, as the domestic demand for sulfuric acid declined, sulfuric acid prices fell down to RMB450 /t in Northeast China and North China and about RMB500 /t in East China, South China and Shandong province, and prices of sulfuric acid made from smelting byproducts fell down to RMB300 to 400 /t.