January 17, 2023
Some relief is in sight for the Sulfuric Acid market, as raw material Sulfur has been softening.
Sulfur is produced as a by-product of refining crude oil, so lower demand for gasoline during the pandemic led to reduced crude oil refining and therefore reduced supplies of by-product Sulfur. Prices for this raw material rose with the shortness of supply. As restrictions have eased, demand for gasoline has increased, leading to higher refinery operating rates.
More recently, the war in Ukraine has resulted in supply chain disruptions for crude oil on a global front. In order to make up for the shortfall in Europe, U.S. oil refineries have begun to run at breakneck rates of above 90% capacity. Supply of elemental Sulfur has gone up. Going into 2023, the Sulfuric Acid market appears to be settling and normalizing as the softened Sulfur prices make their way down the supply chain to the end-use acid markets. Additionally, a change in demand for truck drivers is leading to reduced transportation costs.
One anomaly is the reduced supply of smelter acid from Europe, which has resulted in increased Sulfuric Acid imports to make up the European demand. This has been driven by the increased energy costs forcing smelting operations to shut down.
With questions about the changes in the Sulfuric Acid market and how they may affect you, reach out to a representative.
