7/25/2017 How do acid prices affect smelter revenues in different regions of the world?

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Sulphur and Sulphuric Acid

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The global sulphuric acid market has shown a declining price trend since 2011, as
sulphur prices have fallen and the traded acid sector has tended towards oversupply. In
both 2013 and 2015, FOB East Asia and FOB NW Europe have had prices at negative
FOB levels, reecting delivered acid prices not covering the cost of delivery to the
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7/25/2017 How do acid prices affect smelter revenues in different regions of the world?

FOB levels, reecting delivered acid prices not covering the cost of delivery to the
customer.
The global trend of decline in acid prices has cut the average revenue from acid at smelters but this effect has not
impacted all smelters to the same degree. The factors that affect the scale of change in revenues are the share of acid
sold to export vs. domestic markets and the relative pricing of those export and domestic market.

Domestic market prices are typically more stable and follow a longer term trend whereas traded market prices have a
higher degree of volatility. For example, the domestic contract price for acid in NW Europe has fallen between 2011
and 2015 by 41% where as the NW Europe export price has fallen by 76%. The differences are more signicant when
looking at the extremes of the price ranges since 2011.

Export vs. Domestic sales share price effect

Market price volatility is only one factor that affects smelter revenues from acid. The other factor is the exposure to
domestic and export markets. Domestic markets are more stable prices and show less variance within a given year.
Smelters with a greater share of sales within the domestic market have more stable and generally higher revenue from

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