Page 186 - CW E-Magazine (24-10-2023)

Special Report

acid, and could even be a net exporter. remains sluggish, Indian sulphur phuric acid with accuracy, as too many
This change can be accelerated dra- burners and smelters will be at variables play a role.
matically if Vedanta’s copper smelter at loggerheads for gaining domestic
Tuticorin resumes operations. market share. What would happen if crude oil
loose its charm as a raw material to
What are the possibilities? Indian smelters run at full capacity, get refined fuel? What if the world
and demand slows down sees much higher growth in electric
Imported acid competes with acid from In such a scenario, the sulphuric vehicles? It would lead to less refin-
Indian smelters acid end-user industry stands to gain. ing of crude oil and less availability
This looks unlikely. Apart from There could be fierce price competition of sulphur. This disruption can change
Indian smelters having advantages in between Indian smelters and sulphur the sulphur and sulphuric acid market
terms of logistics costs, they are better burners. Smelters have no option but beyond one’s imagination.
equipped to serve the Indian markets to sell acid, and this may result into a
promptly. Indian smelters are also the large chunk of sulphur burning opera- What would happen if African
best placed to serve the Ma’aden’s Fer- tions becoming economically unviable. smelters were forced to comply with
tiliser plant in Saudi Arabia. Hence, a This shall result into less availability of environmental regulations? Many
price war between Indian and Japanese/ material, and sulphuric acid will define of these smelters are currently not
Koreans smelters looks unlikely. But, if a new price equilibrium. equipped to capture SO . If forced to
2
that happens, it would be lose-lose situa- do so these smelters would then end
tion for every smelter. In fact, there Prima facie it appears the price equi- up capturing much more SO than to-
2
is a great possibility of Japanese and librium would be in favour of smelters, day. This could be a reality in the next
Koreans smelters completely withdrawing unless cost of production of acid by couple of decades, and increase smelter
from the Indian market and focus on sulphur burners drops to unthinkable acid supply.
markets in Chile, Thailand, Indonesia, levels. It can happen if sulphur markets
etc. This would give Indian smelters crash. Large sulphuric acid producers And what would happen if the
and sulphur burners a free run in their may opt to keep the prices of sulphuric African smelters do not spend enough
home turfs. They would continue cater- acid to the level that acts a barrier for capex to comply with new environ-
ing to Indian demand and follow the sulphur burners to resume operations. mental norms? They would be forced
existing pricing strategy. Markets shall move acid prices to higher to close, which would affect acid avail-
levels, when supplies from sulphur ability adversely.
Indian smelters run at full capacity, burners are no longer available.
and demand remains stagnant Hindalco’s think tank has envisaged
In such a scenario, international What is the outlook? the following outcome:
markets especially in Southeast Asia, It is very difficult to forecast long Sulphuric acid markets shall start

West Asia and North Africa, will play term demand, supply, and prices of sul- changing between 2024-25.
a crucial role.
150 1,000
469
If demand in these regions remains 130 80 500
strong, Indian smelters and sulphur 110 -
burners can explore international -71 -500
markets to park excess acid. Sulphur 90 -570 -448
burners exporting sulphuric acid is not 70 -1,000
new. Two Lions in China has been a -1,290 -1,412 -1,234 -1,563 -1,350 -1,500
consistent exporter of sulphuric acid. 50 -1,517 -2,000
Similarly, Kutch Chemicals in India 30 -1,920
has exported sulphuric acid in the past. -2,257 -2,500
We have also seen sulphur burners in 10 -3,000
India exporting to North Africa in the 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
past. Such exports help keep the price Balance Sulphuric acid price
equilibrium in the Indian markets. If Fig. 7: Indian sulphuric acid: balance (kilotonnes) and price (US$/tonne)
demand in these importing countries Source: Hindalco.

186 Chemical Weekly October 24, 2023

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