Sulphuric Acid – Industry and Market Overview
Sulphuric acid, once known as Oil of Vitriol, is one of the most important industrial chemicals used today. As a consequence, it is also one of the largest volume chemicals produced globally. Sulphuric acid is produced across a wide range of industries with the majority being used in the production of phosphate fertilisers.
Sulphuric acid is a highly reactive acid and is completely miscible in water. While it tends to be a clear, oily liquid, it can vary in colour from clear to dark brown or black depending on the source of production and its intended use. For stability, plant reliability and transport efficiency, it is generally produced, shipped and stored at a concentration of 98% w/w (% weight per weight) with a relative density of approximately 1.8 g/ml.
While over 50% of sulphuric acid is used in the manufacture of phosphate fertilisers, the rest of the market (industrial applications) has a vast array of uses across multiple industries which is set to drive ongoing demand. An overview of sulphuric acid industrial applications is shown at Table 9 on the previous page.
Methods of Production
Driven by demand consistency and broad industrial applications there has been a steady stream of production capacity coming on line. Production methods for sulphuric acid primarily vary by source material, however the vast majority involve sulphur dioxide (SO2)
as the precursor to sulphuric acid production.
The figure below illustrates global consumption by industry with phosphate fertilisers representing the dominant consumer of sulphuric acid. This trend is unlikely to change significantly in the coming years with additional fertiliser production capacity creating a steady demand for sulphuric acid supply. This is driven by the fundamentals of an increasing population, the wealth and associated dietary effect within developing markets and the subsequent demand on agriculture for high volume, quality crops. Due to the sheer volume of sulphuric acid traded every year and the tight market balance, product pricing reflects a commodity whose behaviour is closely related to global phosphate fertiliser prices.
Excess phosphate fertiliser production capacity remains, with consumption forecasts for moderate 2% yoy increases in the near term, which will in turn will require additional sulphuric acid. The overall outlook for sulphuric acid remains positive. Friel Consulting Services is forecasting compound annual demand growth rates to average 2.6% yoy through to 2023F. Further demand from metal ore leaching and chemical synthesis is predicted to contribute to continued growth beyond 2023F.
Within Australia, key incumbents in the phosphate fertiliser market include CSBP Fertilisers (part of Wesfarmers Energy, Chemicals and Fertilisers Group) and Incitec Pivot. Sulphuric acid demand for leaching (metallurgical) processes also remains significant, particularly given Australia’s large precious and base metals industries. For example, BHP Billiton’s Olympic Dam Project at Roxby Downs utilises significant volumes of sulphuric acid and is forecasting future expansion during 2018F–2019F.
Whilst sulphuric acid is generally traded as a domestic company to company commodity, the international market remains a secondary marketplace, typically utilised when the domestic market is temporarily unavailable. This may occur when managing downstream interruptions to demand; for example customer outages (planned & unplanned). Port Pirie (South Australia) has easiest access to international trade, however, there are other facilities located around the coast of Australia. Interacid SA is a key trader with significant storage facilities in Australia. Similarly, Coogee Chemicals stores and distributes sulphuric acid with storage capacity on both coasts of Australia.