Capacity of Sulfuric Acid Is in Serious Surplus

By Wang Wei

Sulfuric acid is one of the important basic chemical raw
materials and also the most important product in the chemical
industry. It is mainly used to produce inorganic chemical
fertilizers. As a basic chemical raw material, sulfuric acid is
also used in nonferrous metal smelting, refining/petrochemical,
textile dyeing/printing, inorganic salts, inorganic/organic
acids, rubber, paints, national defense, pesticides,
pharmaceuticals, leather tanning and coking. In addition, it is
used in washing iron/steel.

Downstream demand stimulates the rapid development of the
sulfuric acid sector

The sulfuric acid sector in China developed rapidly in 2005.
Output reached 44.6216 million tons, an increase of 16.7% over
2004. The output can basically meet the demand in downstream
chemical fertilizer, iron/steel and textile sectors.

    1. Consumption in chemical fertilizers has increased
drastically

China is a major producer and consumer of nitrogenous
fertilizers and phosphate fertilizers in the world. Phosphate
fertilizers are the focus in the development of the chemical
fertilizer industry in China. In China, chemical fertilizer
production is the biggest consumption sector of sulfuric acid.
The production of 95% of phosphate fertilizers uses sulfuric
acid as raw material. The chemical fertilizer sector consumed
31.6 million tons of sulfuric acid in 2005, accounting for 67.9%
of the total, of which the production of phosphate fertilizers
used 30.4 million tons, 65.3% of the total.
    The chemical fertilizer sector in China started to report
a profit from the fourth quarter of 2003. Chemical fertilizers
were in short supply in 2004 and the price hit a new high. With
the state's more recent boosts for agriculture, the demand for
chemical fertilizers will grow drastically. The rapid growth of
the chemical fertilizer sector will stimulate the dramatic
increase in demand for sulfuric acid in China.

   2. The consumption in non-fertilizer sectors has grown stably

From 2003, China entered a period of rapid development. Besides
chemical fertilizers, the demand for sulfuric acid in other
downstream products such as hydrofluoric acid, dimethyl sulfate,
aginomoto, viscose fiber and iron/steel has also increased
remarkably. Due to the restriction in the availability of raw
materials such as fluorite and titanium ore, however, there is
only a stable growth of the sulfuric acid consumption in
non-fertilizer sectors. The consumption of sulfuric acid in
non-fertilizer sectors was 14.97 million tons in 2005, an
increase of around 9% over 2004. It is expected that the
consumption of sulfuric acid in non-fertilizer sectors will
account for 36.5% of the total in 2010.

Imports of sulfuric acid have increased constantly

Before the early 1990s sulfur in China mainly came from pyrite,
sulfur concentrate from nonferrous metal production and
smelting flue gas. The serious lack of sulfur resources
restricted the development of the sulfuric acid industry. There
was a global oversupply of sulfur in the mid-1990s. The reduced
price and the abundant supply of sulfur in the international
market promoted the development of sulfur-based sulfuric acid
production in China and eased the supply deficit of sulfur. The
strong demand for sulfuric acid in phosphate compound
fertilizers in Yunnan, Guizhou, Sichuan and Hubei provinces and
in non-fertilizer sectors in coastal areas was satisfied.
    Due to slow growth of China's sulfur output, the
sulfur-based sulfuric acid production developed in recent years
basically depends on imported sulfur. The imported amount of
sulfur was 8.3065 million tons in 2005, an increase of 22.8% over
2004. China's massive import of sulfur has caused a price rise
of sulfur in the international market, a drastic increase of
production costs in the sulfur process and the weakening of
market competitiveness in sulfuric acid sector. If no measures
are taken to restrict the sulfur-based sulfuric acid production,
the imported amount of sulfur will become greater and the market
risk will become higher.
    It is expected that China's capacity to produce sulfuric
acid will reach 75.0 million t/a in 2010, but the total domestic
demand will be only 66.3 million tons. The capacity of sulfuric
acid will therefore be in surplus and the competition will become
fiercer.

Table 1  Major Sulfuric Acid Producers in China
                         in 2005         (thousand tons)
Producer                        Output (containing 100%
H2SO4)
Yunnan Three Circles Chemicals Co.          1 337.7
Guizhou Hongfu Industrial Development Co.    1 034.5
Jiangxi Copper Group Corp.                  984.0
Tongling Nonferrous Metal (Group) Inc.      964.7
Yunnan Furui Chemical Co.                   924.9
Fuling Chemical Industry Co.                  821.4
Hubei Yangfeng Stock Co.                    724.0
Yunnan Copper Co.                           661.6
Guizhou Kailin (Group) Co.                   630.5
Yunnan Honglin Chemical Co.                 625.9
Sichuan Longmang Group Co.                  605.2
Guizhou Xiyang Fertilizer Co.                 581.1
Tongling Chemical Industry Group Co.        572.3
Jinchuan Group Co.                            571.4
Sichuan Hongda Group Co.                    570.2
Source: CNCIC Chemdata

Table 2  Supply and Demand of Sulfuric Acid
          in China in Recent Years   (thousand tons)
Year              Output       Import      Export    
Consumption
2000    23 650.4    367.5    5.8    24 012.1
2001    26 513.4    962.3    5.2&nbs