Sodium Sulfide Market Analysis

By Zhang Guohong, Chen Aibing, Nafine Chemical Industry Group Co., Ltd.

Production & sales

China produced 329.4 kt of sodium sulfide during January-June 2016, 90.2 kt of which was a byproduct of barium sulfate. In the same period of last year, the output was 279.9 kt, and 88.5 kt of it was a byproduct of barium sulfate. This year’s January-June output was 49.5 kt higher than the same period of last year. There are 38 producers of sodium sulfide in China. They are concentrated mainly in Northwest China, Southwest China and Central China.
There are two reasons for the increased output: Through overhaul and renovation, some producers that were idle or running at low load last year, such as Sichuan Chaoqiang Chemical Co., Ltd. and Inner Mongolia Lichuan Chemical Co., Ltd., have resumed normal production this year, increasing their output. The other reason is that some producers, such as Nafine Chemical Industry Group Co., Ltd., increased their output through technical renovation.
A total of 299.0 kt of sodium sulfide was sold during January-June 2016. The volume sold in the same period of last year was 306.0 kt. Inventories totaled around 40.5 kt at the end of June (around 7.5 kt in Southwest China, around 16.0 kt in Northwest China and around 17.0 kt in other regions). Output exceeds sales on the whole this year.
The volume sold was lower than in the same period of last year. There are two reasons for the reduction: The greater pressure of environmental protection has affected production in downstream sectors. The other reason is that the demand for sodium sulfide in downstream sectors such as leather processing and pesticide/pharmaceutical intermediates is slack.

Export

China exported 82.3 kt of sodium sulfide during January-June 2016: 17.1 kt in January, 8.2 kt in February, 12.4 kt in March, 13.5 kt in April, 14.1 kt in May and 17.0 kt in June.
In 2015, 91.3 kt of sodium sulfide was exported during January-June: 14.9 kt in January, 13.1 kt in February, 14.5 kt in March, 16.4 kt in April, 17.0 kt in May and 15.5 kt in June.
This year’s January-June export volume was 9.0 kt (9.8%) lower than in the same period of last year. There are two reasons for the reduction: Sodium sulfide was added to products requiring inspection in February this year and the increased procedures have affected export. The other reason is that two major sectors in other counties that use sodium sulfide are ore dressing and leather processing, and demand in these sectors is lower this year.

Market price

Sodium sulfide prices have declined drastically since last year. Figure 1 shows the price trend of sodium sulfide in typical producers in Shanxi, Xinjiang and Sichuan by June of 2016.
Judging from the price trends of various producers during January-June, the price of sodium sulfide has entered a declining track. It is in line with the overall price trend of chemicals. The prices of sodium sulfide from various producers are slightly higher than in the same period of last year.

Development forecast

The overall economic functioning of the chemical industry in China was stable during January-June, but there was still a considerable decline. Some positive changes in the economic functioning of the chemical industry in the first six months are mainly the result of rebounding crude oil prices and replenishment of the market supply. Competition in the sodium sulfide market is getting fiercer. With impacts from downstream sectors, the market has gradually shrunk. Demand for sodium sulfide is shrinking. Output is higher and demand is lower, so the market is oversupplied. Sodium sulfide prices have declined constantly in 2016 and may quickly drop to RMB1 600-1 700/t. Some producers will undoubtedly throw in the towel. With further capacity reduction measures taken in China, environmental protection policies will become tighter and enterprises that fail to meet their requirements will be forced to shut down or suspend production.