Market Overview

In September, the domestic sulfuric acid market failed to achieve the expected “Golden September” peak-season performance. Persistent supply-demand imbalances weighed on market sentiment, causing prices to decline steadily throughout the month.

On the supply side, maintenance activities resulted in production losses of approximately 783,300 tonnes, while the industry capacity utilization rate reached 64.01%. Meanwhile, downstream demand remained weak, with operating rates in major consuming sectors declining. Monoammonium phosphate (MAP) production rates fell to 48.06%, while diammonium phosphate (DAP) operating rates stood at 47.68%. Titanium dioxide and caprolactam industries also experienced slight production declines.

With weak support from both supply and demand fundamentals, market transactions remained sluggish. Looking ahead to October, as the autumn fertilizer season gradually ends, winter stockpiling demand has not yet started, and sulfur cost support weakens, the sulfuric acid market is expected to remain under pressure. Prices may continue fluctuating at low levels, with increasing regional differences.

Sulfuric Acid Prices Continue Decline Under Weak Demand Pressure

Throughout September, the domestic sulfuric acid market showed an overall downward trend, with prices declining in most regions.

From the cost perspective, sulfur prices retreated from previous highs. The average monthly price of granular sulfur at Zhenjiang Port was around 7,472 yuan/tonne, down 1,314 yuan/tonne month-on-month, a decrease of 14.96%. Pyrite prices also weakened, causing cost support for sulfuric acid production to shift from “loosening” to “weakening.”

At the beginning of the month, the market continued the weak trend seen in late August. Trading activity remained limited, while some producers experienced inventory pressure. Downstream fertilizer and chemical companies mainly purchased based on immediate demand and maintained a cautious wait-and-see attitude.

Due to insufficient market drivers, sulfuric acid prices declined across major regions, including Central China, East China, South China, and Northwest China.

By mid-month, the restart of maintenance units increased market supply further, putting additional pressure on prices. Some smelter-based acid plants in Anhui, Hubei, and Henan saw prices fall below 1,000 yuan/tonne, while lower-priced resources flowed into higher-priced markets, intensifying bearish sentiment.

As the Mid-Autumn Festival and National Day holidays approached, suppliers focused on reducing inventories, while downstream buyers continued seeking lower prices. The market gradually shifted toward a buyer-oriented environment.

By the end of September, prices accelerated their decline as the market searched for a bottom. Although purchasing activity improved in some high-price regions, overall supply remained sufficient, demand recovery was limited, and cost support continued weakening.

Production Profits Show Diverging Trends

In September, profitability among different sulfuric acid production processes showed noticeable adjustments compared with the previous month.

• Sulfur-based acid: Profit was approximately -270.61 yuan/tonne, improving by 50.55% month-on-month, but declining significantly year-on-year.
• Smelter-based acid: Profit reached around 1,090 yuan/tonne, decreasing 22.83% month-on-month but remaining profitable due to its by-product advantage.
• Pyrite-based acid: Profit was approximately -170.58 yuan/tonne, declining 38.12% month-on-month.

The changes in profitability were mainly driven by falling raw material costs and declining sulfuric acid selling prices.

Although sulfur and pyrite prices decreased, sulfuric acid prices in many regions fell faster than production costs, resulting in different profit trends among production methods. Smelter-based acid maintained the strongest profitability due to lower production costs as a by-product of metal smelting. Meanwhile, sulfur-based and pyrite-based acid production remained under pressure.

Overall, downstream demand weakness remained the main factor limiting sulfuric acid profitability.

Supply-Demand Balance Shifts from Tightness to Oversupply

The sulfuric acid market experienced a significant change in supply-demand dynamics from July to September.

In July, the market faced a supply shortage, with the supply-demand gap reaching approximately 543,900 tonnes, supporting an average price of 1,862 yuan/tonne.

In August, supply gradually recovered. Total supply increased 4.13% month-on-month, while demand rose only 0.38%, narrowing the supply shortage to 258,600 tonnes. The average market price declined to approximately 1,709 yuan/tonne.

In September, the market structure shifted from a relatively tight balance to oversupply. Total supply was expected to reach around 8.155 million tonnes, while demand was estimated at 7.99 million tonnes, creating a surplus of approximately 162,000 tonnes.

With increasing supply pressure and weakening consumption, the average sulfuric acid price was expected to fall further to around 1,397 yuan/tonne.

Supply Increases While Downstream Demand Weakens

Domestic sulfuric acid production increased in September as previously maintained units gradually resumed operation.

The industry capacity utilization rate reached 64.01%, increasing 1.22 percentage points month-on-month but decreasing 3.25 percentage points year-on-year.

During the month, 29 production units underwent maintenance, resulting in production losses of approximately 783,300 tonnes, down 61,600 tonnes compared with August. With fewer maintenance-related losses, market supply recovered significantly.

However, demand performance remained weak.

The phosphate fertilizer sector, the largest sulfuric acid consumer, continued reducing operating rates as the autumn fertilizer season ended.

• MAP operating rate: 48.06%, down 6.78 percentage points month-on-month
• DAP operating rate: 47.68%, up slightly month-on-month but significantly lower year-on-year

Titanium dioxide and caprolactam production also declined, with operating rates falling to:

• Titanium dioxide: 71.39%
• Caprolactam: 69.41%

Weak demand across multiple industries resulted in limited purchasing activity and increased inventory pressure among sulfuric acid producers.

October Outlook: Regional Divergence Expected

The sulfuric acid market in October is expected to show a clear pattern of regional divergence.

Supply Side

Maintenance activities for smelter-based acid plants are expected to increase during October and November. Major plants in regions such as Shandong, Zhejiang, Guangxi, Anhui, and Jiangxi may undergo scheduled maintenance, potentially reducing regional supply and lowering overall operating rates.

Demand Side

Demand from the fertilizer sector is expected to remain weak. Phosphate fertilizer producers continue facing high finished-product inventories and low operating rates, limiting sulfuric acid consumption.

Although chemical industry demand may recover slightly, regional differences will remain significant.

Market Forecast

After the holiday period:

• Prices in parts of Central China, Southwest China, and South China may receive some support.
• Previously high-priced regions such as Shandong, Northeast China, and North China may continue experiencing downward pressure.

The market is gradually moving toward a new regional balance. Once regional price differences narrow, sulfuric acid prices may seek a clearer market direction.