Argus Media Limited

09/12/2023 | News release | Distributed by Public on 09/12/2023 05:01

Sulphuric acid fobs rise on OCP’s unexpected return

Sulphuric acid fobs have risen sharply since mid-August as fertilizer producer OCP returned to the market - following several months of inactivity - to buy sulphuric acid, a key feedstock for phosphate fertilizer production.

Chinese acid fobs rose by $29/t on average since mid-August, when OCP entered the market, while northwest European acid fobs rose by $23/t on average.

The sudden demand for acid was triggered by higher phosphate demand, which supported an increase in operating rates and higher raw material demand.

Morocco's DAP fobs have risen $103/t on average from when prices bottomed out on 29 June.

In northwest Europe, the nearest supplier to OCP, the buyer secured acid cargoes arriving from September to November inclusive, and it aims to buy December tonnage next. This demand for cargoes resulted in fob levels to jump 180pc from mid-August to date.

Argus last assessed northwest European acid prices were $35/t fob on a midpoint basis on 7 September.

OCP also looked at China to source sulphuric acid, with acid cargoes snapped from the second half of August from that region.

While details of the number of cargoes remain scant, it is believed 5-7 cargoes were purchased. But many more could be possible as the fertilizer producer remains active in the market.

Argus last assessed China fobs were at $35/t fob on 7 September, well above the -$12.50/t fob recorded on 20 July.

The recovery in Chinese fobs was also supported by a firm domestic market, which pushed up domestic prices and diverted some of the tonnes away from the seaborne market, further limiting tonnes and propping up export prices as a result.

By Lili Minton

Sulphuric acid, DAP comparison