The increased risk to shipping in the Red Sea has resulted in Morocco's phosphate producer OCP to source most of its sulphuric acid requirements from European producers.
Appetite for European-origin acid cargoes has increased over the past two months as a number of attacks on commercial shipping in and around the Red Sea by Yemen's Houthi rebels has led to vessels taking the longer and slower route via the Cape of Good Hope, thus affecting spot demand for Asian-origin acid cargoes.
The January-February import sulphuric acid line-up shows a total of 421,500t of acid arriving to OCP's Jorf Lasfar port, of which nearly 90pc originates from European ports — including northwest Europe, the Mediterranean, Black Sea and Turkish ports — Argus data show.
This is a sharp contrast to shipments in December, when Asian cargoes represented about half of the acid that arrived at the Moroccan port.
The attacks on commercial shipping in and around the Red Sea have been increasing in frequency, adding to the risk and the higher costs of shipping using this route.
The Chemroad Journey — the latest acid cargo of Asian origin for OCP — sailed from Two Lions' Zhangjiagang port at the end of December and is scheduled to discharge at Jorf Lasfar this week. The route diversion added approximately 10 days to the journey.
Chemical tanker rerouting has also reduced vessel supply by 7-8pc while adding to tonne miles, according to Stolt Tankers.
OCP demand spurs EU fobs
Strong demand from OCP for European acid — the nearest supplier to OCP — has led to northwest European fobs to remain robust so far this year.
Argus' last assessed northwest European acid prices were $42.50/t fob on a midpoint basis on 8 February, around 70pc higher than on the same date last year.
Meanwhile, Chinese acid prices were $12/t fob on a midpoint basis on 8 February, sharply down from $47.50/t fob in late September, when OCP's spot demand from Asian acid was active.
