Lead: In June 2026, the domestic sulfuric acid market operated at a high level. China's 98% sulfuric acid Chempricehub price index rose from 1,785 RMB/ton at the beginning of the month to 1,850 RMB/ton at the end of the month, with a monthly average of 1,827 RMB/ton, up 4.21% month-on-month. On the supply side in June, concentrated maintenance shutdowns of metallurgical acid plants and cost inversions for sulfur-based acid plants created a "dual supply contraction," with monthly capacity losses reaching up to 1.0835 million tons. On the demand side, traditional downstream sectors such as phosphate fertilizers and titanium dioxide generally operated at a loss, with continuous declines in operating rates, while the new energy sector became the only bright spot, supporting market demand in regions like Sichuan and Guizhou. Looking ahead to July, as the autumn fertilizer preparation cycle begins, demand is expected to gradually recover. Supported by both costs and supply, sulfuric acid prices still have room for further upward movement.

I. Price Trends: High-Level Fluctuations, Divergence Among Three Acid Types Intensifies

The domestic sulfuric acid market in June showed an overall trend of "weakness early, strength later." At the beginning of the month, affected by the rapid decline of sulfur prices from historical highs, the cost support expectation for the market weakened somewhat, leading to minor price corrections in some regions. However, entering the middle of the month, as the effect of concentrated maintenance at metallurgical acid plants gradually materialized, the supply gap continued to widen. Coupled with a recovery in downstream purchasing activity, market prices stabilized and rose steadily.

From the perspective of production routes, the price trends of the three acid types diverged significantly. The average price of sulfur-based acid was 2,337.5 RMB/ton, up 11.98% month-on-month – the largest increase – mainly driven by high raw material sulfur prices. The average price of metallurgical acid was 1,700 RMB/ton, up 3.03% month-on-month, a relatively moderate increase, but its profit margins continued to expand thanks to extremely low production costs. The average price of pyrite-based acid was 1,825 RMB/ton, up only 1.39% month-on-month, exhibiting the most stable trend.

In regional markets, Hubei and Yunnan performed particularly well. The ex-works price (delivered to plant) for 98% metallurgical acid in Hubei was in the range of 1,900-2,000 RMB/ton, up 17.28%/11.11% month-on-month. In Yunnan market, the delivered price for 98% metallurgical acid was 1,630-1,750 RMB/ton, up 15.60%/19.05% month-on-month. The main reasons for the leading price increases in these regions were local acid plant maintenance or smooth sales to surrounding areas, fundamentally supported by downstream phosphate chemical demand, which continuously depleted market circulating supply.

II. Supply Side: Maintenance Wave Combined with Cost Inversion, Active Supply Contraction

The domestic sulfuric acid supply side contracted significantly in June, becoming the core force supporting prices. Data shows that domestic sulfuric acid production in June was estimated at 8.19 million tons, down 2.09% month-on-month. Capacity utilization fell to 62.74%, a decrease of 0.89 percentage points from the previous month and a year-on-year decline of 7.50 percentage points. The supply contraction mainly stemmed from two factors: smelters entering their scheduled maintenance period, and sulfur-based acid enterprises actively reducing production due to persistently high raw material costs.

Table 1 Monthly Sulfuric Acid Supply-Demand Balance, May-June 2026

| Indicator | May | April | Change | % Change | June (Est.) | % Change |
|---|---|---|---|---|---|---|
| Production | 836.5 | 894.8 | -58.30 | -6.52% | 819 | -2.09% |
| Imports | 0.09 | 1.71 | -1.62 | -94.74% | 0.1 | 11.11% |
| Total Supply | 836.59 | 896.51 | -59.92 | -6.68% | 819.1 | -2.09% |
| Downstream Consumption | 817 | 857 | -40.00 | -4.67% | 827 | 1.22% |
| Exports | 11.67 | 13.84 | -2.17 | -15.68% | 0.3 | -97.43% |
| Total Demand | 828.67 | 870.84 | -42.17 | -4.84% | 827.3 | -0.17% |
| Supply-Demand Balance | 7.92 | 25.67 | -17.75 | 1061.98% | -8.20 | 203.54% |
| Period Average Price | 1753 | 1724 | 29.00 | 1.68% | 1827 | 4.22% |

In terms of maintenance, 40 sulfuric acid units nationwide were under maintenance in June, with monthly capacity losses reaching up to 1.0835 million tons, an increase of 299,600 tons from the previous month, up 38.21% month-on-month. Maintenance units were mainly concentrated in Shandong, Anhui, Hubei, Inner Mongolia, etc., and most were planned routine maintenance. Notably, some sulfur-based acid units remained shut down due to economic factors, and the restart of this capacity will be highly dependent on a decline in sulfur prices.

From a supply-demand balance perspective, the market landscape underwent a fundamental shift in June. Total supply was estimated at 8.191 million tons, total demand at 8.273 million tons, resulting in a supply-demand balance of -82,000 tons, shifting from a slight surplus in May to a substantive shortage. This reversal in the supply-demand structure was the core driving force supporting the continued rise in the monthly average price in June.

III. Demand Side: Traditional Downstream Weak, New Energy the Only Bright Spot

In June, sulfuric acid demand presented a clear pattern of divergence: "traditional sectors sluggish, emerging sectors supporting the market." Downstream fertilizer and chemical sectors in the traditional market showed strong resistance to high-priced raw materials, generally adopting a "buy-as-needed" strategy, resulting in weak demand support. In contrast, the new energy sector performed well, becoming an important force propping up the market.

From the perspective of downstream operating rates, sector performance varied significantly. The operating rate for monoammonium phosphate (MAP) was 48.98%, a slight increase of 1.99 percentage points, still at a low level. The capacity utilization rate for diammonium phosphate (DAP) was only 36.88%, down 4.84 percentage points, hitting a new low for the year. The operating rate for titanium dioxide was 74.39%, down 3.56 percentage points month-on-month. The operating rate for caprolactam was 69%, down 3.58 percentage points month-on-month. The widespread sluggishness in traditional downstream sectors was the main reason for the continuous decline in apparent consumption.

In stark contrast to traditional downstream sectors, demand from the new energy sector remained strong. The operating rate for iron phosphate (FePO4) in June was 84.49%, up 1.58% from the previous month; the operating rate for lithium iron phosphate (LFP) in June was 83.94%, up 2.88% from the previous month. Due to the concentration of the LFP industrial chain in Sichuan and Guizhou provinces, demand for acid from the new energy sector remained firm, continuously consuming local and surrounding market circulation and supporting high regional prices. Although the proportion of acid used in new energy remains relatively small, its annual growth rate of over 20% makes it the downstream sector with the greatest growth potential.

IV. Profit Patterns: Extreme Divergence – Metallurgical Acid Reaps Rewards

The most striking phenomenon in the sulfuric acid industry in June was the extreme divergence in profits among the three production routes. Under the same market environment, the profitability of different process routes varied drastically, forming a rare "fire and ice" pattern.

Metallurgical acid, benefiting from its by-product nature, continued to enjoy substantial profits under fixed costs. In June, the profit for metallurgical acid reached 1,550 RMB/ton, up 3.33% month-on-month and significantly up 292.41% year-on-year. Since the raw material for metallurgical acid is flue gas, a by-product of non-ferrous metal smelting, there is almost no raw material cost. Therefore, as sulfuric acid prices rose, profit elasticity was extremely high. For smelters of copper, lead, zinc, etc., the sulfuric acid business has become an important profit growth point, with some companies even experiencing the peculiar phenomenon of "heavy losses in copper smelting, huge profits in sulfuric acid."

In stark contrast to metallurgical acid, sulfur-based acid producers are deeply mired in losses. In June, the profit for sulfur-based acid was -403.83 RMB/ton, down 57.70% month-on-month and down 4,278.75% year-on-year. Although sulfur-based acid prices were also rising, the price increase for the raw material sulfur was even greater, leading to a continuous exacerbation of the cost inversion. In early June, sulfur prices briefly broke through the historical high of 11,750 RMB/ton. Although they fell back later, they remained in the high historical range, and the operating pressure on sulfur-based acid companies remained enormous.

The profitability of pyrite-based acid fell between the two. In June, the profit for pyrite-based acid was 94 RMB/ton, up 36.23% month-on-month and up 1,147.93% year-on-year. Although the profit level was not high, it remained profitable. Benefiting from relatively stable pyrite prices, the operating conditions of pyrite-based acid companies were noticeably better than those of sulfur-based acid companies.

V. Outlook: Bulls vs. Bears – Can the Uptrend Continue in July?

July Forecast: It is expected that the sulfuric acid market in July will benefit from cost support and a demand recovery, with prices expected to rise. At the end of June, major acid plants in Anhui, Hubei, Jiangxi, Fujian, Yunnan, etc., have already raised prices. Other acid plants in these regions and surrounding areas are also expected to follow suit. Therefore, the domestic average sulfuric acid price in July is likely to experience a high-level increase. On the cost side, the tight supply of sulfur is unlikely to ease in the short term, with prices remaining high, providing firm cost support for sulfuric acid. Meanwhile, due to high raw material costs, sulfur-based acid companies continue to operate at a loss, keeping industry operating rates low, limiting the prospect of a significant recovery in domestic supply in the short term. On the demand side, as July marks the start of the autumn fertilizer preparation cycle, agricultural demand from downstream phosphate fertilizers, etc., will gradually recover, and purchasing activity will increase, significantly enhancing demand-side support for prices. Supported by both "high firm costs" and "low supply levels," coupled with demand recovery momentum, sulfuric acid prices are expected to gain sufficient upward momentum in July, continuing the upward trend.

Three-Month Forecast: Looking ahead to August-September, the sulfuric acid market may face downward pressure after high-level fluctuations, possibly around late September. On one hand, as some acid plants complete maintenance, supply is expected to increase. On the other hand, the core risk lies in late September. To prepare for the National Day holiday, acid plants usually carry out concentrated inventory reductions. However, transportation of hazardous chemicals will be restricted during the holiday, leading to a surge in shipment pressure for acid plants, forcing them to offer discounts to reduce inventory. Additionally, if sulfur import volumes gradually recover or geopolitical tensions ease, leading to a looser supply outlook, cost support will also weaken simultaneously. At that point, there is a possibility of a correction from high acid prices.