From the past 5-10 years, the global sulfuric acid market has been expanding exponentially in production facilities. The fertilizer industry is a major driver for sulfuric acid and is expected to increase the capacity additions in the Middle East, China, and South America.
Global Sulfuric Acid Supply Situation
The global sulfuric acid market is majorly influenced by the production capacity of phosphate fertilizers and the stringent environmental regulations to curb the emissions. The demand for sulfuric acid is higher than the supply which will contribute to its price rise in the near future. The global production of agriculture is predicted to grow in the next decade, which will drive the sulfuric acid market. Most of the chief production markets are expected to get self-sustained. The key suppliers for sulfuric acid are China, India and the U.S.
Regionwise Supply Trends
The primary regions facilitating the major supply of sulfuric acid include Asia, North America, and Europe. Let us understand in detail the supply-demand trends in these major production regions and the key sulfuric acid suppliers governing the market.
The North American sulfuric acid market is somewhat balanced and is provided with marginal imports. The market is also quite fragmented here. Presently it has approximately 40 suppliers. North America has also installed one of the world’s largest capacities for sulfuric acid and has a strong presence over the fertilizer producers. However, due to an oversupply of sulfur in North America, the suppliers have given a high negotiation power to the buyers. Some of the key suppliers in this region include BASF, Chemtrade, Agrium, Canexus LP, and Mexichem.
The European market is excessively supplied with sulfuric acid. It is moderately fragmented, with nearly 50 suppliers. Most of the suppliers are smelter based, which means that the material is not sold at discounted prices very often. The suppliers in Europe have powerful buyers from both the fertilizer and chemical segments owing to a multitude of supply options available. Some of the key suppliers in the European sulfuric acid market include Lukoil, Essemar and Kem One.
The Asian sulfur market observes a huge supply-demand gap and is undersupplied. It is a highly fragmented market with nearly 150 suppliers in the region. A majority of bulk volume buyers for sulfuric acid belong to the agriculture segment. The small-scale buyers belonging to the pharmaceutical and chemical industry have a low negotiation power as compared to the buyers from the agriculture segment. Some of the key suppliers include the Hindustan Group, Singapore Refining Company, and GS Caltex Oil.
Factors Influencing the Sulfuric Acid Market
There have been a number of factors that have affected the global supplier trends for sulfuric acid. Firstly, it has witnessed an oversupply that hinders new entrants from stepping into the market. Secondly, the issue of discounted selling has arisen because of the surplus production of sulfuric acid by smelters. The third factor is the storage issues that have been faced by the suppliers due to high inventory costs.
The demand for sulfuric acid has witnessed an upward curve, primarily because of the compelling nature of the end-user industries. Its global consumption and supply will continue to rise in the next ten years. Many of the key suppliers are now focusing on mergers & acquisitions along with capacity expansions to propel the sulfuric acid market fourfold in the coming years.