Hydrochloric Acid Makes a Comeback
December 1, 2020
For the past eight months, the US Hydrochloric Acid market has been plagued by soft demand, plentiful supply, and 4-year-low prices. Now, with the return of cooler temperatures, the market has shifted.
Hydrochloric Acid is a corrosive mineral acid, and one of the cheapest and most widely used commodity chemicals due to its high versatility. It may be produced intentionally (i.e. as a part of the chlor-alkali process, “on-purpose acid”) or as a by-product of another product. Both on-purpose acid and by-product acid have had supply outages in recent weeks. This large reduction in supply has caught up with and finally overtaken the softened demand condition existing in the market, leading to price increases and even supply issues for some marketers.
What kind of supply outages? A little bit of everything actually! Multiple producers had unplanned outages due to hurricanes. One major producer had to declare force majeure. Several by-product producers had planned shutdowns for plant maintenance. And Chlorine, a pre-cursor to Hydrochloric in the chlor-alkali process, has become tight. Since there are many outlets for chlorine, it makes sense for a chlor-alkali producer to shift production away from less profitable Hydrochloric Acid and divert the same chlorine molecule to more profitable applications such as plastics. PPE and other downstream derivatives continue to command higher prices due to overall stronger demand. Essentially, the low market price of Hydrochloric Acid led to producers not being able to cover costs of producing it, and therefore has become unsustainable.
While these events may impact your Hydrochloric Acid price, CORECHEM does not foresee supply issues. With further questions about how the market shift may affect you, reach out to a sales representative today.