Skip Navigation LinksMy Argus / News / News Story

Printer friendly

Viewpoint: US sulphuric acid supply to loosen in 2018

27 Dec 2017 13:00 GMT
Viewpoint: US sulphuric acid supply to loosen in 2018

Houston, 27 December (Argus) — The sulphuric acid market comes out of a tight 2017 with little plant maintenance scheduled for 2018, but expected growth on the consumption side could keep the market balanced.

Recent weeks have brought some clarity to an uncertain supply side. The Noranda Income Fund reached an agreement to end the nine-month strike at its zinc refinery, while Kennecott resumed sulphuric acid production.

Kennecott's production may be lower in 2018 than it has been previously because of an increase in the amount of down time. It is currently expected to produce 850,000-1mn t for next year.

Looking ahead to 2018, Veolia's three- to four-week planned outage at its Burnside, Louisiana, plant is expected to impact production by 35,000-40,000t. Next year will also be the first full year after Vale's transition to one furnace at its Sudbury, Ontario, mine in June 2017 — decreasing sulphuric acid production by 100,000-150,000 t/yr.

New consumption is expected in Henry, Illinois, for Unity Envirotech's ammonium sulphate plant, with a current estimated requirement around 150,000 st/yr. Tamra Mining is also expected to consume more consistently than CS Mining had been at its copper mine in Milford, Utah, with consumption around 90,000-100,000 st/yr.

Maintenance outages were the main market drivers in 2017, with planned outages at several major producers. The total impact was an estimated 400,000t of lost supply from planned outages at Glencore's four facilities, Rio Tinto Kennecott, ASARCO's smelter and Vale in Sudbury. Unplanned outages at Kennecott and the Noranda Income Fund's zinc refinery further tightened supply in the US.

Despite the work, US imports fell by 11pc on the year to 2.4mn t from January-October 2017 as buyers were able to cover requirements through US production. Canadian supply was down by 9pc at 1.6mn t, reflecting tightness from Noranda and Vale.

Imports from Mexico fell by 24pc to 422,000t, with increased consumption from MM Boleo in Mexico decreasing available acid. Consumption in the US southwest has also declined as Freeport ramps down its Safford, Arizona, mine.

Import volumes by vessel are expected to remain low in 2018, after falling 6pc on the year to 414,000t from January-October 2017. Buyers were rarely compelled to pay prices in line with Latin America in 2017. This is not expected to change in 2018 with less domestic supply impacted by maintenance.

The 2017 decrease in imports was not expected with the amount of sulphuric acid production that was off the market. Producers reported low inventories throughout the year, albeit not low enough to bring in volumes from off shore.

US import prices to the southeast or US Gulf regions moved up the low-$50s/t cfr in early-December from the $30s/t cfr at the end of last year. The increase reflects stronger pricing in the more liquid markets in Latin America and improved netbacks in northwest Europe, with limited US activity following other markets.