Lead: In August 2026, China's domestic sulfuric acid market was hit by an unexpected "cold snap." After a cost-driven price surge in the first half of the year, the market took a sharp downturn in August as supply–demand contradictions intensified across the board. As of August 27, the national weekly average price of 98% concentrated sulfuric acid stood at 1,908.22 yuan/ton, down another 0.96% week-on-week. Although the absolute price level remained relatively high by historical standards, market expectations have undergone a fundamental reversal — the "cold snap" has arrived, and there are few signs of a near-term rebound.
I. Supply side: scheduled maintenance "benefits" fail to materialize as supply pressure is fully unleashed
The concentrated resumption of supply-side operations is the core driver behind this round of price declines. In August, smelter acid units in Shandong, Hubei, Inner Mongolia, and other regions returned to full production after earlier maintenance work was completed, leading to a sustained increase in spot supply circulation. According to Chempricehub data, the domestic sulfuric acid capacity utilization rate rebounded to 63.24% in August, up 0.7 percentage points from the previous period. A total of 26 sulfuric acid units underwent maintenance during the month, with a monthly production loss of 844,900 tons — yet this figure actually increased by 146,700 tons from the previous month. This indicates that even with a considerable scale of maintenance, the incremental output from restarts has fully offset maintenance losses. The most typical case is the resumption of Hubei's key acid plants after maintenance, which has brought ample supply additions to the entire Central China region. According to Chempricehub data, the combined capacity utilization rate of 49 sulfuric acid enterprises in Shandong reached approximately 68.59% in August, with smelter acid operating rates as high as 101.93%. The supply side's support for prices has completely evaporated, and it has instead become a key force suppressing any price rebound.
Meanwhile, the closure of sulfuric acid export channels has further magnified domestic supply pressure. Since May 1, 2026, China has fully suspended exports of ordinary industrial sulfuric acid. In July, China's total sulfuric acid exports amounted to only 1,000 tons. As the world's largest sulfuric acid exporter, the export halt means that output that previously flowed to overseas markets is now entirely retained domestically, further exacerbating the already loose supply–demand balance.
II. Demand side: autumn fertilizer demand "fails to show up" as downstream procurement turns ice-cold
If supply recovery is the driver of the "cold snap," then weak demand is its root cause. August typically marks the transition from the traditional demand offseason to autumn fertilizer stocking, but the start of autumn fertilizer procurement has lagged severely. Demand from the key downstream phosphate fertilizer sector has fallen short of expectations, with enterprises only making purchases for immediate needs. In terms of operating rates, the capacity utilization rate of the monoammonium phosphate (MAP) industry stood at only 54.84%, down 1.73 percentage points month-on-month; diammonium phosphate (DAP) utilization was 45.85%, showing a month-on-month recovery but still at historical lows. Chemical downstream segments such as titanium dioxide and caprolactam were also running at relatively low utilization rates due to profitability concerns and seasonal weakness. A widespread "buy on rising, not falling" wait-and-see sentiment in the market has further extended downstream procurement cycles.
Even more concerning is the continued restriction on phosphate fertilizer exports; exports of MAP and DAP remain suspended. Export restrictions mean that downstream phosphate fertilizer producers cannot absorb their output through overseas sales, making it difficult to raise operating rates, and consequently keeping sulfuric acid procurement demand persistently depressed. With demand under pressure from both domestic weakness and external constraints, the sulfuric acid market is unlikely to obtain effective demand support in the near term.
III. Cost side: feedstock pullback undermines bottom-line support
The key reason sulfuric acid prices were able to sustain high levels previously was the sustained surge in sulfur prices. However, this support is now loosening in August. The average sulfur price at Zhenjiang Port fell sharply to 8,243 yuan/ton, a decline of 7.83%. In August, the average sulfur price at ports was 8,786 yuan/ton, down 2.94% month-on-month. The downward correction in feedstock sulfur prices has noticeably weakened the cost support for sulfuric acid.
Looking at the three sulfuric acid production processes, sulfur-based acid producers continue to suffer severe cost inversions. According to Chempricehub data calculations, profits for sulfur-based acid are approximately -540 yuan/ton, while ore-based acid profits are around -131 yuan/ton. Although smelter acid still retains a profit margin of roughly 1,400 yuan/ton thanks to the low-cost advantage of copper smelting by-products, the deep decline in the copper concentrate treatment charge (TC) index is changing the cost logic of smelter acid. Theoretically, deeply negative TCs should force smelters to cut production, but the relatively high by-product sulfuric acid prices are providing important profit support for copper smelting. Yet as sulfuric acid prices fell in August, this hedging effect is weakening. Pyrite prices also entered a phase of loosening at highs in August, with mine pricing expectations for September generally pointing downward.
Overall, the pullback in sulfur prices, combined with deepening negative TCs and declining pyrite prices, is shifting sulfuric acid cost support from "multiple underpinnings" to "multiple erosions." The weakening of cost support, coupled with the continued release of supply, has formed a compounding effect that has stripped sulfuric acid prices of their last line of defense.
IV. Market sentiment: pervasive pessimism, no near-term recovery in sight, but mid-to-long-term positives remain
September forecast: Prices are expected to face downward adjustment pressure, sliding from the high range of 1,590–1,600 yuan/ton, likely trading within a range of 1,550–1,580 yuan/ton. With the Mid-Autumn Festival and National Day holidays approaching, regulatory controls on hazardous chemical transport will be tightened, hindering cross-regional resource flows. To avoid inventory accumulation risks during the holidays, acid plants are showing a stronger willingness to offer discounts in actual transactions. Demand-side support remains insufficient during the off-season, as the pace of recovery in fertilizer market operating rates falls short of expectations. High raw material costs and elevated finished product inventories are constraining production enthusiasm in downstream chemical and fertilizer sectors, with procurement limited mainly to essential needs. Spot trading is currently in a standoff phase, with market attention focused on the restocking window in late September. If prices do not decline further after transport restrictions are lifted, expectations of reduced output from maintenance at certain acid plants in October could serve as a trigger for a price rebound.
Three-month outlook: As maintenance progresses and holiday-related demand catalysts emerge, prices are expected to bottom out and then recover. October should see prices return above 1,650 yuan/ton, with a solid footing above 1,750 yuan/ton possible in November. In October, supply contraction and essential demand support: multiple major units in Guangxi and other regions will enter cold maintenance cycles in a concentrated manner, resulting in a significant near-term reduction in supply that will effectively alleviate market oversupply pressure and provide support for price recovery. In November, intensifying maintenance boosts bullish sentiment: maintenance schedules announced by major acid plants in Jiangxi, Anhui, and other regions will further tighten supply expectations. Combined with downstream restocking demand after the National Day holiday, the price center of gravity is expected to continue moving upward.
Comments
0