Due to the increase of raw materials and the pull of downstream demand, the market price of sulfuric acid in China in the first quarter was operating at a high level. From May 16 to May 17 at the annual meeting of the sulfuric acid industry held in Yangzhou City, Jiangsu Province, Wu Xuemei, Secretary General of the China Sulfuric Acid Industry Association, said that the domestic sulphuric acid market will obviously exceed supply, and it is expected that the export of sulphuric acid will increase; In the year, China's sulfuric acid production capacity will be close to 100 million tons, and its excess capacity will exceed 10 million tons.
Production and demand growth price fluctuations
According to incomplete statistics, by the end of 2010, there were 464 sulphuric acid production enterprises above designated size, and the sulphuric acid production capacity was about 84 million tons. Relying on the capacity of the new large-scale installations, the output of sulfuric acid in China last year exceeded 70 million tons, reaching 70.33 million tons, a year-on-year increase of 17.8%. In 2010, apparent consumption of sulfuric acid hit a record high, reaching 71.69 million tons, an increase of 18.6% year-on-year. Among them, the use of acid fertilizer accounted for 69.8%, an increase of 18%.
Wu Xuemei pointed out that from the perspective of the first quarter of this year, sulfuric acid production continued to increase with the increase in the acidity of phosphate compound fertilizers and other chemical industries. In the first three months, China's sulfuric acid production was 17.43 million tons, a year-on-year increase of 14.1%. The main growth points come from three aspects: First, the output of smelting acid production in Inner Mongolia, Henan, Shandong, and Anhui increased; second, the output of sulfur acid produced in Jiangsu and Hubei increased; and third, the growth of mineral acid production in Guangdong.
In April, due to the decline in demand for phosphate compound fertilizers, the price of sulfuric acid in some regions fell slightly. In May, due to the reduction of imported sulphuric acid, the high price of sulphur, and the overhaul of some companies, prices in eastern China rebounded. From April to early May, sulfuric acid prices in the northeast region range from 370 to 550 yuan (t price, the same below), from 480 to 660 yuan in North China, 580 to 720 yuan in Shandong, and 550 to 620 yuan in East China, in central China. 370 to 600 yuan, 380 to 480 yuan in South China, 380 to 480 yuan in the Southwest, and 320 to 470 yuan in the Northwest.
The demand for capacity expansion is still difficult to determine
For this year's domestic sulfuric acid market situation, Wu Xuemei talked about his own views. First, the sulfuric acid production capacity has grown rapidly. Although the “Twelfth Five-Year Plan†requires that no new device be built in the last 3 to 5 years, the new device is still being constructed under the impetus of phosphorus fertilizer and energy demand. For example, the two sets of 800,000 tons/year of sulphur-burning acid under construction in Zhenjiang and three sets of 800,000 tons/year of sulphur-burning sulphuric acid built in Hubei for phosphorus compound fertilizer will be completed and put into production by the end of this year.
The large-scale copper, zinc and lead smelters currently under construction will also be completed and put into production in the next two years, with an increase of approximately 10 million tons of acid production capacity. Pyrite ore and sulfur concentrate production sites and surrounding areas are still planning to build ore production. . In addition, coking, steel, coal and other industries are also taking the road to acid desulfurization. Therefore, during the “Twelfth Five-Year Plan†period, the output of sulfuric acid will also increase significantly. At the same time, during the structural adjustment process, a batch of small and medium-sized devices with a capacity of 100,000 tons/year will be withdrawn successively.
She predicts that if the production situation of phosphorus compound fertilizer is basically stable this year, the amount of acid used in industry will increase with the growth of the national economy. China's sulfuric acid production can reach over 75 million tons, which is 5 million tons more than in 2010. However, if the export of phosphate fertilizers is not smooth, the cost will be too high in the second half of the year, and domestic sales will be sluggish, the production of phosphate fertilizers will drop sharply. This will affect the demand for sulphuric acid, the price of sulphuric acid will go down, and the production of sulphur-burning acid and mineral acid will fall sharply.
The overall situation in the downstream is not optimistic
Wu Xuemei emphasized that 70% of China's sulfuric acid production is used for phosphate fertilizers, and the market conditions of phosphate fertilizers have a great influence on the sulfuric acid market. Therefore, to analyze the direction of the sulfuric acid market, we must first observe the phosphate fertilizer market. She believes that this year's domestic phosphate fertilizer market will present the following characteristics:
First, production capacity will continue to increase, and production will continue to increase. According to the statistics of the association, by the end of 2010, the total production capacity of phosphate fertilizer will be approximately 21 million tons P2O5, and the Ministry of Agriculture estimates that domestic demand will be 13 million tons. Calculated according to the 80% operating rate, the production capacity will exceed nearly 4 million tons. Among them, the production capacity of diammonium phosphate was 15 million tons, which was calculated at an operating rate of 85%. The overcapacity was over 5 million tons. However, some places are still expanding their capacity. The capacity of diammonium phosphate will be close to 20 million tons in the next year or two. The supply of phosphate compound fertilizers will be more abundant and prices will remain relatively stable.
The second is that raw Material prices continue to rise, and the industry's efficiency will drop sharply. Take DAP as an example. Compared with July last year, the recent factory price has been raised by 15%, while the production cost has increased by 40%. At present, the price of sulphur is 145 US dollars higher than the same period of last year. This alone increases the cost of DAP by 550 yuan. Coupled with the increase in the prices of raw materials and fuels such as phosphate rock, synthetic ammonia, and coal, the industry's benefits will decline this year.
Third, the tightening of export policies not only drastically lowered the export base price, but also shortened the export window period. With the apparent overcapacity of phosphate fertilizers and the sharp rise in raw material prices, the impact on the industry is enormous. Despite the strong demand for international phosphate fertilizer and higher prices this year, our export situation is not optimistic. Recently, India has signed with the United States a large list of imports of diammonium phosphate in the first half of the year and implementation of the CIF price of US$612, which is obviously determined by China’s export policy. After China's export period expires, the price may rise immediately. It is expected that this year, China's ammonium phosphate exports can only be equal to the cost or low profit.
In addition, the issue of the inconsistency in the measurement basis of the Customs tax collection method and the policy development department has not yet been resolved. If the tax is levied on the basis of taxation at the benchmark price currently enforced by the Customs, it faces the dilemma of huge loss of ammonium phosphate exports. China's export is blocked, the international phosphate fertilizer market will be firm due to the decrease in supply, which in turn will support the increase in international sulfur prices, which in turn will put the domestic phosphate fertilizer companies under pressure from sales and rising costs. The phosphate fertilizer industry will be hit hard again and spread to the sulfuric acid market. .
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