European sulphuric acid market squeezed on outages
The European sulphuric acid market is going through a period of tight supply following outages at smelters and lower production rates at sulphur burners, which have impacted overall availability of acid in the domestic market.
The industry is working on a week-by-week basis as availability remains variable because of lack of availability from smelters and lower availability of molten sulphur impacting sulphur burner operations.
As a result, sellers and distributors face uncertainty as the volatile supply has resulted in order cancellations as they cannot guarantee quantities to their offtakers further than two weeks ahead for both types of acid, in some cases.
The supply shortage has been reflected in an increase in the third-quarter contract settlements for both smelter and sulphur-burnt acid, which settled on 18 July.
Smelter-based acid contracts for the third quarter rose by around €10-15/t on the previous quarter, while third-quarter sulphur-burnt acid contracts rose by €30-40/t on the previous quarter.
There are concerns in the domestic market that start-up issues at a key supplier in northwest Europe will tighten availability further.
Aurubis' Hamburg plant — which produces high-quality acid — faced problems following its return from maintenance on 11 July. The smelter had been off line undergoing heavy maintenance since early May.
The shortfall in smelter acid from the Aurubis closure could in turn have a knock-on effect on refinery sulphur production by limiting availability of higher grade sulphuric acid for the alkylation process.
It is not yet clear how long production at the plant could be curtailed, but it has further squeezed the market of high-quality sulphuric acid.
Overall, the market is likely to be short of supply in July and into the first half of August with industry sources concerned about the limited supply to cover the requirements for the domestic industry.
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