Page 184 - CW E-Magazine (24-10-2023)

Special Report

sulphuric acid like oleum, dimethyl entire generation of sulphuric acid to keep Sulphuric acid price movement
sulphate, chlorosulphonic acid, etc. metal production running smoothly. 2025 could be a turning point in the
Another substantial advantage of the sulphuric acid industry in India. The
sulphur burning process is the gene- There is a relation between sulphur moot question is how prices will move.
ration of steam that can be used to prices and sulphuric acid prices sold by Certainly, increase in supply shall out-
generate electricity. The generally sulphur burners and smelters. While the pace increase in demand. However, the
accepted norm is: 1-tonne of sulphur market prices are determined by funda- expected tendency for prices to soften
yields 3-tonnes of sulphuric acid and mentals like demand and supply, unrea- if supply exceeds demand, may not be
2.60-tonnes of steam (which can pro- listic prices are not uncommon. Sulphur accurate in this case, due the nature of sul-
duce 1,877-kWh of electricity). This burners have a certain cost of manufac- phuric acid. Being corrosive, with pH
brings in differences in the commercial turing sulphuric acid, after discount- around 2, sulphuric acid has constraints
aspects of sulphuric acid generated by ing steam credit. While every sulphur of storage. Furthermore, the markets
sulphur burner and smelters. burner would like to maximize profit by for sulphuric acid are largely regional,
selling sulphuric acid at the maximum due to high transportation cost. Sulphu-
Due to limitations of storage of price, smelters too would like to maxi- ric acid’s price is highly sensitive to
sulphuric acid, environmentally re- mize profit, but with primary objective the prevailing demand-supply dyna-
sponsible smelters will have to sell the of evacuating sulphuric acid. mics. While market can swing from
Table 4: Sulphuric acid generation capacity of Indian smelters high premium to discount over cost of
[Kilotonnes] production swiftly, the discounted price
Smelter Metal 2023 2024 2025 2026 2027 generally does not last long.
Hindalco – Dahej Copper 1,200 1,200 1,200 1,200 1,200 For the ease of understanding, we
Hindustan Zinc – Zinc and 750 750 750 750 750 shall consider the cost of producing
Chandaria lead sulphuric acid by sulphur burning route
Hindustan Zinc – Debari Zinc 275 275 275 275 275 is one-third of the landed price of sul-
Hindustan Zinc – Rajpura Zinc and 550 550 550 550 550 phur. Steam credit is covered by cost of
Dariba lead production of acid plus profit margin.
If one buys sulphur at say $50 a tonne,
Vedanta – Tuticorin Copper 0 0 0 0 0 the break-even selling price shall be
Adani – Mundra Copper 0 250 1,500 1,500 1,500 $16.50 – 17 per tonne.
Total 2,775 3,025 4,275 4,275 4,275
Source: Hindalco. Smelters also have a cost of produc-
sulphuric acid prices, US$ /
CFR US Gulf CFR Chile (Spot) CFR Brazil
FOB NW Europe FOB Japan/S Korea
300

200

100

0

-100
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Fig. 5: Sulphuric acid price trends
Source: CRU.

184 Chemical Weekly October 24, 2023

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