European sulfuric acid market faces uncertainty amid oversupply and demand fluctuations

Market sources reported that the European sulfuric acid market continued to navigate a challenging landscape at the start of September marked by oversupply and fluctuating to bearish demand. FOB Values were "declining" as of Sept. 1, according to a trader, due to extra length in the market.

Despite bullish sulfur prices, the acid market has seen prices under pressure due to a notable lack of demand.

The first trader said, "I would expect FOB values to continue declining with the absence of OCP and traders having length to get rid of; values are now down to a two-digit figure."

Current prices were reported at around $90-$100/mt FOB West Europe, but a bearish sentiment prevailed following a significant oversupply of cargoes noted as of Aug. 27 by many market players.

Market participants had previously held onto higher price ideas, but the latest deal to Brazil at about $140/mt CFR shifted expectations based on calculated netbacks. This deal likely sourced its cargoes from Europe, leading to netback pricing estimates of $85-$95/mt FOB West Europe.

Moreover, OCP's efforts to redirect excess cargoes, stemming from heavy buying earlier in the year, further complicated market dynamics. With the fourth quarter typically signaling increased demand, uncertainties remain regarding price stability.

The first trader added, "Q3 cargoes of OCP have been requested to be delayed, and at least one cargo was cancelled. As such, we anticipate that OCP would be out of the market in Q4 , and with this big absence of demand in the market, FOB values are likely to decline sharply."

While some sources indicated offers could drop to $90-$95/mt FOB, the lack of spot activity in the region resulted in varying price ideas. One sulfuric acid producer, however, said there was" no surplus of acid" to be seen, emphasizing the opaque and complex nature of current market conditions in Europe.

Looking ahead, traders are cautiously optimistic about potential demand from Latin American consumers, as sellers may need to offload excess sulfuric acid tons. The interplay of supply, demand, and market sentiment continues to shape the outlook for sulfuric acid producers and traders in Europe.

Platts, part of S&P Energy, assessed FOB West Europe sulfuric acid at $90/mt on Aug. 27.