Lead-in: The domestic sulfuric acid market continued its sluggish trend, with prices accelerating downward in search of a floor. As of this week, the Chempricehub index for 98% domestic sulfuric acid plunged to RMB 1,380 per tonne, down 10.39% from the previous week—a significantly wider decline than in the preceding two weeks. Although downstream phosphate fertilizer operating rates showed signs of slight recovery, the convergence of three bearish factors—rising supply-side utilization, collapsing sulfur costs, and logistics constraints during the upcoming holidays—has fostered widespread pessimism, leaving pre-holiday acid prices without support.
The sustained release of supply remains the core factor suppressing sulfuric acid prices. According to Chempricehub data, domestic sulfuric acid capacity utilization stood at 64.10% this period, an increase of 0.26 percentage points (up 0.41%) from the previous period, though still 2.77 percentage points lower year-on-year. No new maintenance shutdowns were reported this week; major ore-based acid producers in central Shandong resumed production, leading to a continuous release of market inventory and relatively ample supply. Meanwhile, smelter acid has been flowing across regions, with low-priced resources disrupting local markets. Some enterprises have seen inventory build-up, increasing their pressure to offload stock.
More notably, the complete closure of export channels has further exacerbated domestic supply pressures. Starting May 1, 2026, China fully suspended exports of general industrial sulfuric acid and by-product smelter acid. Total sulfuric acid exports in August amounted to only 2,500 tonnes, a drastic 99.43% drop compared to the same period in 2025. This extreme contraction in export volumes means that production originally destined for overseas markets has remained entirely within China, worsening the already loose supply-demand balance. Concurrently, incremental demand from downstream sectors remains limited, intensifying the supply-demand contradiction.
Regarding regional maintenance dynamics, some units at major acid plants in Henan’s Jiyuan region are expected to resume production next week. While this may lead to a minor adjustment in overall capacity utilization, total supply will remain abundant. Furthermore, major acid plants in Guangxi, Jiangxi, and Anhui provinces are scheduled to enter concentrated maintenance cycles in October and November. While this may cause a temporary tightening of supply, short-term pressure is unlikely to ease significantly.
Table 1: Capacity Utilization of Sulfuric Acid and Key Downstream Industries
(Data Source: Chempricehub)
While capacity utilization rates for key downstream industries generally trended upward, the improvement in demand was insufficient. In the fertilizer sector, Monoammonium Phosphate (MAP) capacity utilization reached 48.78%, up 0.87 percentage points (increase of 1.82%) from the previous period. Diammonium Phosphate (DAP) utilization rose slightly by 0.16 percentage points to 44.11%. The modest rebound in phosphate fertilizer operations provided basic support for sulfuric acid demand. However, mainstream ex-factory prices for 55% powder MAP in Hubei have fallen to approximately RMB 4,000 per tonne, with frequent appearances of low-end goods. Downstream compound fertilizer enterprises are maintaining only essential small-lot restocking and exhibit strong price-negotiation leverage, resulting in minimal pull-through effect on sulfuric acid procurement.
The chemical sector performed relatively better. Titanium dioxide capacity utilization increased by 0.43 percentage points to 72.27%, while caprolactam utilization rose by 1.13 percentage points to 69.22%. However, with titanium dioxide profits at negative RMB 3,401 per tonne and caprolactam profits at negative RMB 1,307 per tonne, downstream products continue to operate at a loss. Consequently, acceptance of high-priced sulfuric acid is limited, and procurement remains strictly driven by immediate needs, offering little effective boost to the market.
In the compound fertilizer segment, capacity utilization stood at 33.41%, up 0.42 percentage points from the previous cycle. In main producing areas, some previously halted units in Henan restarted operations. However, in Shandong, sales performance fell short of expectations, forcing enterprises to focus on depleting existing inventories, which limited increases in operating rates. Although downstream compound fertilizer shipments improved slightly, enterprises still hold raw material stocks. Facing competition from low-priced sources, procurement remains focused on small-volume replenishment based on immediate needs, with strong intentions to push prices down.
Overall, while demand shows signs of mild recovery, the characteristic of a "weak peak season" persists. Downstream purchasing intensity for sulfuric acid remains feeble, failing to provide effective support to market prices.
Domestic sulfuric acid prices are expected to continue falling next week, with little prospect for support before the holidays. On the supply side, operating rates among domestic acid plants will remain largely stable with minimal fluctuation. Major producers will maintain current loads, with only minor resumptions in specific regions, ensuring continued ample market supply. On the demand side, the phosphate fertilizer market will likely remain in a stalemate with limited price volatility, though some immediate need-based restocking may occur before the holidays. Chemical industry demand shows divergence but trends slightly upward overall, yet offers limited stimulus to the sulfuric acid market. Cost-side support continues to weaken as sulfur prices oscillate downward amid cautious market sentiment. Pyrite prices are declining in line with the weak sulfuric acid market, while copper, lead, and zinc ore prices remain stagnant at high levels, unable to provide effective floor support.
Consecutive prior reductions in acid prices have significantly damaged market procurement confidence. Downstream users and traders are mostly adopting a wait-and-see approach, showing low enthusiasm for taking delivery, while negotiation margins on actual transactions have loosened. Simultaneously, with the Mid-Autumn Festival and National Day approaching, expectations of transportation restrictions are rising. Acid plants face persistent pressure to reduce inventory before the holidays, keeping shipment burdens high. Under the combined influence of weak demand, diminishing cost support, and holiday-related factors, acid prices lack robust backing. Overall, the domestic sulfuric acid market is projected to continue its weak downward trajectory next week, with transaction centers in most regions likely shifting lower again. A substantive recovery in pre-holiday prices appears unlikely.
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