Sulfuric Acid Demand Plateaus

By Liao Kangcheng, China Sulfuric Acid Industry Association

Output growth past peak

China made 95.63 million tons of sulfuric acid in 2016, down 1.1% YoY and the first annual decline since 2000 (except for 2008 during the financial crisis). This shows that the plateau for the output of sulfuric acid has already come and the market volume will no longer see considerable changes.
Comparing sulfuric acid output from different raw materials, sulfur-based output was 42.90 million tons, down 4.4% YoY; pyrite-based was 18.75 million tons, down 7.2%; smelting-based was 33.13 million tons, up by a noteworthy 9.6%; and output from other raw materials was 0.86 million tons (see Figure 1).
China had 125.00 million t/a sulfuric acid capacity last year, a small increase of only 1.4% over the previous year. But that small figure obscures the year’s dynamics of development. Pyrite-based capacity was 24.66 million t/a, down considerably, by 8.6%; sulfur-based was 57.44 million t/a, up 4.3%; smelting-based was 40.39 million tons, up 6.6%; and capacity using other raw materials was 2.01 million t/a.
Large enterprises capable of over 1 million t/a operate 47% percent of the nation’s sulfuric acid capacity, firms with 0.3-1.0 million t/a capacity operate 32%, and firms capable of less than 0.3 million t/a contribute very little. Sulfur-based sulfuric acid and smelting-based sulfuric acid are produced mainly by large enterprises, whereas medium and small enterprises produce much of the pyrite-based sulfuric acid.

Industrial distribution was concentrated

The sulfuric acid industry in China is concentrated in regions producing phosphate compound fertilizers and regions with advanced industry. The output of sulfuric acid in the four phosphorus-producing provinces was 42.53 million tons in 2016 (up 0.3% YoY), or 44.5% of the national total. Among the four phosphorus-producing provinces,three – Yunnan, Hubei and Sichuan –produced less sulfuric acid than in the previous year, but Guizhou made more. With its advanced industry, East China made 25.55 million tons of sulfuric acid, or 26.7% of the total. Output in Northwest China declined considerably, while the other regions saw little change (see Table 1).

Table 1   Output of sulfuric acid by region, 2016

    Output (million ton)    Growth YoY (%)    Proportion (%)
4 phosphorus-producing provinces (Yunnan, Guizhou, Sichuan and Hubei)    42.53    0.3    44.5
East China    25.55    -2.7    26.7
South China and Chongqing    15.10    0.1    15.8
Northeast China and North China    6.62    0.1    6.9
Northwest China    5.83    -6.5    6.1
Total output    95.63    -1.1    100


Table 2   Output of sulfur-based sulfuric acid by region, 2016

    Output (million tons)    Growth YoY (%)    Proportion (%)
4 phosphorus-producing provinces (Yunnan, Guizhou, Sichuan and Hubei)    30.44    0.9    71.0
East China    8.67    -15.7    20.2
South China and Chongqing    2.16    -11.9    5.0
Northeast China and North China    1.62    2.7    3.8
Total output    42.90    -4.4    100



Sulfur-based sulfuric acid

Production of sulfur-based sulfuric acid in China is concentrated mainly in the four phosphorus-producing provinces and East China. Output in the four phosphorus-producing provinces was 30.44 million tons in 2016, or 71% of the national total and an increase of 0.9% YoY. East China made 8.67 million tons, or 20.2%, down 15.7%YoY. South China and Chongqing also made considerably less YoY (see Table 2).

Smelting-based sulfuric acid

Production of smelting-based sulfuric acid in China is distributed mainly in regions mining nonferrous metals. Output of smelting-based sulfuric acid in coastal areas has increased in recent years. Major producing provinces include Anhui, Henan, Yunnan, Shandong and Gansu. These five provinces produced 53.9% of the national total in 2016.

Pyrite-based sulfuric acid

Pyrite-based sulfuric acid is produced mainly in regions producing pyrite and pyrite concentrates. Sichuan, Guangdong, Anhui, Hubei and Jiangxi are the biggest producers of pyrite-based sulfuric acid.
Sulfuric acid output from large enterprises increased, but medium and small enterprises slowed down. Concentration of productions in the larger firms increased further (see Table 3).Twenty two enterprises with produced over 1.00 million tons each in 2016, and their combined output was 40.01 million tons (up 8.5% YoY), or 41.8% of the national total, 3.7 percentage points higher than in the previous year. The combined output of other enterprises was 55.632 million tons, down 7.0% YoY.
The top 10 enterprises together produced 34.02 million tons in 2016, up 8.0% YoY, or 35.6% of the national total, 3 percentage points higher than in the previous year. In terms of product variety, the output proportion of sulfur-based sulfuric acid in the top 10 enterprises was 8.3% higher than the previous year. As a proportion of total output, smelting-based sulfuric acid was up 9.2 percentage points and pyrite-based sulfuric acid was up 0.2 percentage points (see Table 4).

Table 3   Concentration of sulfuric acid production, 2016

    Number of enterprises    Output
(million tons)    Growth YoY (%)    Proportion (%)
Enterprises making over 1 million tons    22    40.01    8.5    41.8
Enterprises making 0.3-1.0 million tons    55    29.10    -2.7    30.4
Enterprises making 0.1-0.3 million tons    110    19.47    -11.7    20.4
Enterprises making below 0.1 million tons    233    7.07    -10.6    7.4


Table 4  Top 10 enterprises sulfuric acid output by raw material, 2016

Raw Material    Output by the top 10 firms (million tons)    Growth YoY(%)    Proportion (%)
Sulfur    25.25    8.3    58.9
Smelting byproduct    19.07    9.2    57.6
Pyrite    5.66    0.2    30.2


Import increased as import prices declined

China imported 1.433 million tons of sulfuric acid in 2016, up 22.4% YoY, according to customs statistics. The average import price was US$28.0/t, down 40.0% YoY. The proportions imported from Korea, Japan and the Philippines were 74.6%, 14.7% and 7.5%, respectively, by weight.
Shandong remained the main destination of imported sulfuric acid,taking 56.4%, while 26.2% went to Guangdong.

The proportion of industrial sulfuric acid was higher

China’s apparent consumption of sulfuric acid in 2016 was 97.00 million tons, down 0.7% YoY. It was the first year consumption declined since 2000.
Consumption in making chemical fertilizers accounted for 57.1%, down 2.6 percentage points from the previous year; consumption in other industrial sectors accounted for 42.9%, 2.6 percentage points higher. Most of the sulfuric acid going into making chemical fertilizers was used in phosphate compound fertilizers, and 95.2% of that went into high concentration fertilizers. Of that, 40.5% was used for DAP and 37.3% for MAP. In non-fertilizer sectors, the biggest uses were in making titanium dioxide, viscose fiber and feed calcium. Its use in the manufacture of hydrofluoric acid, caprolactam, wet-process purified phosphoric acid and dyestuffs was also noteworthy. The balance was consumed in light industry, the textile industry and the iron/steel industry.

Development trend

Sulfuric acid capacity under construction or planned for construction this year includes an 800kt/a unit of Zhejiang Heding Copper Co., Ltd., a 200kt/a unit of Yunnan Yimen Copper Co., Ltd., a 350kt/a unit of Yunnan Hualian Zinc & Indium Co., Ltd., a 1.20 million t/a unit of Guangxi Nanguo Copper Co., Ltd., a 1.60 million t/a unit of China Aluminum Dongnan Copper Co., Ltd. and a 1.80 million t/a unit of Tibet Julong Copper Co., Ltd. These units are expected to start production during 2018-2020.
”Zero growth of chemical fertilizers,” proposed by the Ministry of Agriculture, and the emergence of new high-effect fertilizers, organic fertilizers and biological fertilizers narrow the market for phosphate fertilizers so the related demand for sulfuric acid will likely decline constantly, gradually shifting sulfuric acid consumption from chemical fertilizer makers to other industrial sectors.