By Li Chong, Liao Kangcheng, China Sulfuric Acid Industry Association

Sulfuric acid

1. Output and product structure
   The total output of sulfuric acid in China was 96.13 million tons in 2017, an increase of 0.5% over the previous year. The product structure shifted further to smelting-based sulfuric acid and its percentage reached 35.0%. The percentage of pyrite-based sulfuric acid came further down to 18.6%. The output of pyrite-based sulfuric acid made a drop of 4.4% to 17.92 million tons and it was the lower level in past 8 years. The output of smelting-based sulfuric acid was 33.64 million tons, an increase of 1.5% over the previous year and no reduction ever appeared in past 20 years. The output of sulfur-based sulfuric acid was 43.61 million tons, an increase of 1.7% over the previous year.

2. Industrial outlay
   The sulfuric acid industry in China is mainly distributed in phosphorus producing regions and major chemical regions. The output of sulfuric acid in 4 phosphorus producing provinces including Yunnan, Guizhou, Sichuan and Hubei was 44.22 million tons in 2017, accounting for 46.0% of the total. The output of sulfuric acid in East China was 24.88 million tons, accounting for 25.9%. Hubei and Yunnan remained to be the biggest sulfuric acid producing provinces. See Table 1 for detail.

   Table 1   Output of sulfuric acid in major provinces of China in 2017 (kt)

3. Further upgrading of industrial concentration degree
   The overall industrial concentration degree of the sulfuric acid industry in China made an evident upgrading in 2017. The output of sulfuric acid in enterprises with a scale of over 300 kt was 71.91 million tons, an increase of 4.1% over the previous year and the percentage in the total output was 74.8%, being 2.6 percent points higher. The output of sulfuric acid in enterprises with a scale of below 300 kt was 24.22 million tons, a drop of 8.7% from the previous year and the percentage in the total output was 25.2%, being 2.6 percent points lower. The output of sulfuric acid in top 10 enterprises was 36.08 million tons, an increase of over 6.1% over the previous year and the percentage in the total output was 37.5%, being 1.9 percent points higher. In terms of production process, the output of sulfuric acid in top 10 enterprises using the sulfur process was 26.80 million tons and the percentage in the total output was 61.4%, being 2.5 percent points higher than the previous year. The output of sulfuric acid in top 10 enterprises using the pyrite process was 5.74 million tons and the percentage in the total output was 32.1%, being 1.9 percent points higher than the previous year. The output of sulfuric acid in top 10 enterprises using the smelting gas process was 19.57 million tons and the percentage in the total output was 58.2%, being 0.6 percent points higher than the previous year. See Table 2 for detail.

Table 2  Output of Sulfuric Acid in Top 10 Enterprises of China in 2017

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‍4. Import and export
   The total import amount of sulfuric acid in China was 1.213 million tons in 2017, a drop of 15.4% from the previous year. In terms of import source, Korea was the biggest import source and the amount imported accounted for 73.7% of the total. Philippines came next and the amount imported accounted for 13.9%. Japan was the third and the amount imported accounted for 10.1%. In terms of product flow, Shandong and Guangdong were the two biggest markets for imported sulfuric acid. More specifically, 38.5% of imported sulfuric acid directly flew to Shandong through Qingdao Customs; 19.1% of imported sulfuric acid flew to Guangdong through Zhanjiang Customs and Huangpu Customs; 24.4% of imported sulfuric acid flew to China through Nanjing Customs.
   The total export amount of sulfuric acid in China was 0.693 million tons in 2017, an increase of 990.2% over the previous year. Jiangsu and Guangxi were the major places of origin for exported sulfuric acid. The amount of sulfuric acid exported through Nanjing Customs accounted for 85.6% of the total. The amount of sulfuric acid exported through Nanning Customs accounted for 13.0%. Two Lions (Zhangjiagang) Fine Chemical Co., Ltd. and Guangxi Jinchuan Group Co., Ltd. were the major sulfuric acid export enterprises. In terms of export destination, Philippines, Morocco, Australia and Chile were the biggest export destinations and the amount of sulfuric acid exported to these 4 countries accounted respectively for 33.5%, 24.4%, 14.3% and 8.4% of the total.

5. Consumption reduction for two consecutive years, frequent price ups and downs
   The apparent consumption of sulfuric acid in China was 96.65 million tons in 2017, a drop of 0.4% from the previous year. It presented a declining trend for two consecutive years. See Figure 1 for detail. In terms of consumption structure, the consumption of sulfuric acid in chemical fertilizer uses accounted for 56.7%, being 0.4 percent points lower than the previous year and the consumption of sulfuric acid in industrial uses accounted for 43.3%, being 0.4 percent points higher.

Figure 1  Apparent consumption of sulfuric acid in China during 2012-2017

   The price of sulfuric acid in China came down first and went up later in 2017. The average price was RMB250/t at the beginning of the year. It maintained a weak trend afterwards and dropped to the lowest of RMB200/t in August. The price made a rebound to RMB360/t at the end of the year.
6. Capacity
   The total effective capacity of sulfuric acid in China was 121.0 million t/a in 2017, a drop of 2.5% from the previous year. The capacity of pyrite-based sulfuric acid was 23.26 million t/a, a drop of 5.7%. The capacity of sulfur-based sulfuric acid was 53.83 million t/a, a drop of 6.3%. The capacity of smelting-based sulfuric acid was 41.78 million t/a, an increase of 3.4%. The capacity of sulfuric acid using other processes was 2.58 million t/a.
   A great number of sulfuric acid units were in a state of production suspension in 2017. Their total capacity reached 7.23 million t/a. Of the total, 45.5% was pyrite-based sulfuric acid and 40.1% was sulfur-based sulfuric acid. New units with a total capacity of 4.20 million t/a were put on stream. In detail, 44.2% of the total was sulfur-based sulfuric acid and 32.9% of the total was melting-based sulfuric acid. According to statistics made by China Sulfuric Acid Industry Association, another 11.20 million t/a capacity will be added in 2018 and 8.00 million t/a of the total will be smelting-based sulfuric acid.

Sulfur

1. Slight output increase, price pickup
   The output of sulfur in China was 5.94 million tons in 2017, an increase of 8% over the previous year. The output of recovered sulfur accounted for 78% of the total in Sinopec and 11% in PetroChina. The price of sulfur made stable readjustments in the first half of 2017. It started to go up from the third quarter and reached the highest of RMB1 850/t at the end of September, being over RMB1 000/t higher than the price of RMB800/t at the beginning of the year. The price of sulfur, however, started to drop from October. The average price of sulfur was RMB1 200/t at the end of the year. The main reason for the price rise of sulfur in 2017 was the concentrated burst of the global demand. Sulfuric acid units started production in both Morocco and Saudi Arabia in 2017. The total demand of sulfur in the world was close to 2.00 million tons. The supply of sulfur in the global market, therefore, became tense in the third quarter of 2017.
2. Import
   The total import amount of sulfur in China was 11.236 million tons in 2017, a drop of 6.1% from the previous year. The average import price was US$104.4/t, an increase of 13.5%. The import amount of sulfur was 0.928 million tons in December, an increase of 9.4% over November and a drop of 9.3% from the same period of the previous year. The average import price was US$171.0/t, an increase of 21.0% over November and an increase of 88.1% over the same period of the previous year.
   The Middle East, Japan-Korea Region and North America were the major regions for the import of sulfur. Saudi Arabia, the United Arab Emirates and Iran were the biggest countries for the import of sulfur. Nanjing, Nanning, Zhanjiang, Wuhan and Qingdao were the biggest customs for the import of sulfur.

Pyrite

   The total output of pyrite in China was 14.588 million tons (converted to pyrite with a sulfur content of 35%) in 2017, an increase of 3.3% over the previous year. In terms of major producing place, the output in Guangdong made a considerable growth over the previous year and the output reduction in Anhui was quite evident.

Situation in 2018

1. There will be quite a number of new units, capacity surplus will be aggravated
   Under the pressure of serious capacity surplus, quite a few enterprises shut down their sulfuric acid units in 2017. Sulfuric acid units in Jiangsu Ruihe Chemical Fertilizer Co., Ltd., Anhui Xinzhongyuan Chemical Co., Ltd., Guangxi Luzhai Chemical Fertilizer Co., Ltd., Chongqing Win-Win Group Co., Ltd. and Sichuan Yingfeng Industrial Co., Ltd. with a total capacity of over 7.00 million t/a are in an idle state. The capacity of new sulfuric acid units, however, keeps starting production. New large sulfuric acid projects based on nonferrous metal smelting, in particular, are being completed and put on stream one after another. It is expected that the capacity of sulfuric acid in China will reach over 130 million t/a at the end of 2018 whereas the demand of sulfuric acid will basically be maintained at a level of 96.00 million tons hardly with any increase. The utilization rate of the sulfuric acid capacity will be further reduced to below 70%.
2. The cost of raw materials will be unduly high, enterprises will have heavy pressure in operation
   Take sulfur-based sulfuric acid for instance. The average price of imported sulfur was US$104/t in 2017, being equivalent to around RMB680/t on the basis of the current conversion rate. Suppose 1t of sulfur can produce 3t of sulfuric acid, the cost of sulfur alone is RMB226 per ton of sulfuric acid. The average price of sulfuric acid is just RMB300/t. The cost of raw material sulfur alone already accounts for 80%. When other costs such as freight, storage fee, payroll and depreciation charges are added, sulfuric acid enterprises can hardly make any profit in operation.
3. The moving of chemical enterprises into industry parks will become an opportunity for readjustments in enterprises
   On September 4, 2017 the General Office of the State Council issued the “Guiding Views for Promoting the Relocation Renovation of Dangerous Chemicals Producers in Densely Populated Urban Areas”. It is clearly defined in the document that medium/small enterprises and large enterprises with major hidden risks should launch full-fledged relocation renovation before 2018 and complete the job before the end of 2020. Other large enterprises and super large enterprises should launch full-fledged relocation renovation before 2020 and complete the job before the end of 2025. Sulfuric acid enterprises that have planned to make relocation include Hubei Zhongfu Chemical Industry Group Co., Ltd., Yichang Xinyangfeng Fertilizer Co., Ltd., Xiamen Xiahua Industrial Co., Ltd. and SinoChem Fuling Chemical Industry Co., Ltd. The total capacity to be relocated will be over 8.00 million t/a.
4. The high input in environmental protection will become a normal status
   Environmental pressure was the most essential key word for the sulfuric acid industry in 2017. The revised “Stationary Source Emission – Determination of Sulfuric Acid Mist – Ion Chromatography” (HJ544-2016) was officially issued for implementation by the Ministry of Environmental Protection in March 2016. Environmental pressure in enterprises will therefore be huge.