Demand from China to Steer Market for Sulfuric Acid Ahead

Sulfuric acid, which has the chemical formula H2SO4, is an indispensable part of the industrial sector. It goes into the production of several other chemical compounds, and there’s hardly an industrial sector worldwide that doesn’t use sulfuric acid in one form or another given its highly reactive nature. With a bevy of applications where it witnesses demand, the global sulfuric acid market has been reporting steady growth over the years.

It is used in the production of synthetic chemicals and while producing fertilizers. It is also pivotal to applications that require pH neutralization – especially in the wastewater industry. Given its desirable attributes as a leaching agent, sulfuric acid is also used in mining and metal applications.

Rising Demand for Chemicals Augurs well for Sulfuric Acid Market

The demand for fertilizers is rising considerably in developing economies with a strong agrarian base. With countries such as India, China, and Brazil are consuming tons of fertilizers every year, the use of sulfuric acid will also show an uptick in these regions. The chemicals industry in China has established its supremacy in terms of both production and consumption of chemicals. As the largest producer of chemicals in the world, China produces over 45,000 different types of chemicals every year. This has attracted foreign companies to make investments in China’s thriving chemicals industry. All of these factors will make the sulfuric acid market in China especially strong.

Fertilizers Industry to Consumer Highest Volume of Sulfuric Acid

The consumption of sulfuric acid will remain the highest in the fertilizers sector as there is currently a pressing need to increase productivity of crops even with arable the amount of arable land reducing to make way for urban infrastructure. In 2014, the fertilizers segment alone consumed over 60% of the sulfuric acid produced worldwide. The demand for sulfuric acid in chemical synthesis is also on the rise and this space will generate massive demand for sulfuric acid over the next six to seven years.

Browse Industry Research Report: http://www.transparencymarketresearch.com/sulfuric-acid-market.html

A Closer Scrutiny of 300 Chemicals in Europe by the ECHA is on the Cards

When the REACH regulation become law in Europe in 2006, companies selling products in or to the region were required to undertake a mammoth task – that of collating a comprehensive set of data on what their chemicals comprise, along with scientific evidence that their chemicals are safe to use. Colossal amounts of data were submitted to the European Chemicals Agency (ECHA) in 2010 and again in 2013.

Regulatory authorities have claimed that their ultimate aim is to make suppliers more responsible so that they would bring only those chemicals to the market that are safe on the environment and members of the public.

By now the ECHA boasts a massive repository of information about all chemicals that are sold in large volumes – those greater than 100 tons a year, to be precise. In addition to this, manufacturers were also required to submit data pertaining to chemicals that could potentially cause any of the following if they are present in volumes over one ton per year: hereditary mutations, cancer, disruption in reproductive toxicity, and pose a danger to aquatic life. For all other substances present in volumes greater than a ton per year, the regulation calls for the data to be submitted by 2018.

Even before the REACH regulation, a number of chemicals were banned since they were found to or suspected to contain harmful chemicals. However, it is now with the latest set of data that a closer scrutiny of the chemicals will be initiated.

The latest lot of 300 chemicals will be added to the list of 200 chemicals that have already been short-listed for detailed scrutiny. Regulators will then be able to decide whether to impose a ban on the chemicals or restrict their production and usage volumes in Europe. Companies manufacturing these chemicals will be under the scanner to ascertain if they are complying with guidelines for the safe usage of these chemicals.

DuPont Could Consider Consolidation Option as Crop Prices Fall and Fertilizer Output Spikes

Companies engaged in farm-focused businesses are seeking out opportunities for consolidation in the backdrop of the recent downslide in crop prices, which has only been aggravated by an increase in fertilizer output. Last week, the Dow Chemical Co said that it was conducting a fresh review of its farm chemicals and seeds business unit. And now, latest reports suggest that DuPont is also considering this strategy to offset the impact of the unfavorable market forces.

DuPont’s interim CEO, Edward Breen, said this week that the company would do what it takes to provide maximum value to their shareholders. He was responding to questions about whether the company was considering selling its farm unit. Edward took charge in early October 2015 in place on Ellen Kullman, who abruptly vacated office.

There have been rumors suggesting that DuPont is considering taking over Dow’s farm unit. This has left market watchers wondering whether the company has the resources to pull off a deal of such major proportions. Breen did not confirm whether or not his company was willing to either purchase a farm unit or sell its own. As of September 30, 2015, Du Pont’s farm unit represented about 22% of the total revenue filed by the company. However, the company expects its sales to show a dip of about 11% to 12% in 2015.

Breen said that DuPont would soon be reviewing its capital allocation strategy afresh and will also be taking a fresh look at its cost structure. The company is one of the largest players in the agricultural chemicals industry. According to the current financial plans of DuPont, it plans to achieve savings to the tune of US$1.6 billion annually by the end of 2017. However, there is a possibility that the company might have to cut back on this target by at least 10% to 20%, a report in Reuters said.

Recovering Russian Economy Revitalizes Demand for Specialty Chemicals

Russia is on the verge of reporting a full economic recovery and this will in turn lead to a higher demand for specialty chemicals, market watchers expect. The financial sanctions imposed on Russia by Western nations in the wake of the Ukraine crisis dealt a blow to the Russian economy. But the country is finally on the brink of emerging from the rough phase.

As the state of the Russian economy improves, the demand for specialty chemicals is expected to return to pre-crisis levels. According to current projections, the surge in the demand for specialty chemicals will largely be brought about by the defense and aerospace, construction, food processing, and consumer electronics industries.

The Russian defense sector, for instance, is expected to see a few multimillion dollar deals in the next few months. The Russian Defense Ministry has reportedly initiated talks with manufacturers of specialty chemicals for the development of chemical-based weapons and combat equipment. The Russian air force has also been in talks with U.S. specialty chemicals supplier, Socomore, to obtain specialty chemicals for a project pertaining to sixth-generation Russian combat aircraft. Currently being developed by the United Aircraft Corporation (UAC), the aircraft is expected to enter serial production somewhere between 2020 and 2022, as it is still in the design stage.

In recent years, the Russian chemicals market has been characterized by a shift from commodity chemicals to specialty chemicals. This shift has opened new avenues for investments for chemical multinationals. These opportunities are accentuated by the fact that the current market penetration levels of specialty chemicals remain low in Russia.

The booming Russian construction industry, too, is ready to take off and will create substantial demand for specialty chemicals in the near future. What might aid the growth of the Russian specialty chemicals market is also the fact that labor costs in Russia are lower than in several other emerging nations. As a result, there is a strong likelihood of chemical majors setting up full-fledged specialty chemicals production facilities in the country over the foreseeable future.

Fuel Consumption in United Kingdom Shows Strong Recovery

A noticeable rise in fuel consumption is being reported from the United Kingdom on account of an upturn in the economic scenario and a decline in fuel prices. According to the UK Department of Energy and Climate Change, fuel consumption in the country is rising at a rate that’s higher than the previous decade. According to officials, the consumption of petroleum in the UK was seen to have increased by 1.6% in H1 2015.

The UK’s roads are now busier than ever, as the economy stands back on its feet. The rates currently being observed in the UK are reportedly the highest since 2005, when petroleum consumption had peaked (in keeping with the trend in other advanced economies). However, with the recession setting in shortly after, the consumption of petroleum saw a progressive decline. Although economic recovery in the UK had begun post 2010, high fuel prices essentially kept consumption low.

Official records show that there has been a steady rise in petroleum consumption in the UK since 2014 Q3. Not surprisingly, the increased fuel consumption in the UK is in keeping with the sharp decline in oil prices that caused a massive upheaval in the oil and gas industry.

Moreover, in Britain, there has been a steady shift from petrol-fuelled vehicles to diesel-fuelled vehicles. This trend has also affected the fuel consumption dynamics to some extent. Market analysts have said that the consumption of diesel is rising at a much higher rate than that of petrol. Moreover, road transportation in the UK is currently at its busiest and this aspect will further contribute to an increase in petrol consumption.

The airlines industry has been seeing an increase in traffic as well, stimulating demand for aviation fuel. However, it is not just the UK, the US has also been reporting an increase in fuel consumption with the economy faring well and fuel prices being lower than before.

Turbulence in Oil Prices Forces Sinopec to Recall 40% of Staff Deployed Overseas

Oil prices have been nose diving for a few months now, and the impact of this change is becoming evident not just on the smaller stakeholders in the value chain, but also on leading oil and gas producers across the world.

Sinopec Group, China’s second-largest energy company, is under increasing pressure to cut costs in the wake of this turbulence in oil prices. In a latest move, the company has decided to recall about 40% of all its overseas staff. These employees are currently deployed at Sinopec’s overseas subsidiary, Sinopec International Petroleum Exploration & Production Co.

A senior official from the company said that the staff deployed overseas will now be called back to the Sinopec headquarters in Beijing – reports in the media said. The company is reportedly recalling about 160 employees from its overseas operations. However, this isn’t the first time that the company is bringing back its employees from offshore locations. In 2014 as well, about 100 Sinopec employees were asked to report back to Beijing. 

The continued instability in the prices of crude oil is now manifesting itself in the form of eroding profitability of Sinopec’s production units. A senior official from Sinopec, who spoke to the media on the condition of anonymity, said that the dent to profits was the key reason behind recalling employees.

The tumbling oil prices have been a result of the recent shale boom in the United States, which has consequently resulted in a glut in the market. This factor has been compounded by other events such a record spike in exports from Iraq and Saudi Arabia reporting an appreciable increase in oil production during this time.

After tumbling oil prices severely hit the profit margins of oil companies worldwide, many of them began to announce cuts in expenses toward the end of 2014. Chinese companies, too, chose this recourse and continue to do so.