Texas (USA): In the latest turn of events, German HCl prices saw a sharp 10.1% increase in February 2024, primarily due to significant rises in manufacturing costs, inflationary pressures, and logistics disruptions. Despite a slight 0.6% growth in the downstream steel manufacturing industry, upstream caustic soda prices rose by over 2%, further contributing to production cost increases. Following Russia’s full-scale invasion of Ukraine, companies including BASF adjusted commodity prices due to logistical disruptions and inflationary pressures amid rising energy costs. In February 2024, the Hydrochloric Acid (HCl) market in both Europe and the United States (US) showcased a parallel trend, experiencing a simultaneous rise driven by various factors impacting upstream, downstream, and feedstock.

Likewise, in the US, the cost of Feedstock liquid chlorine drove the overall HCl price trend. Liquid Chlorine, a crucial ingredient for HCl production, experienced a notable price increase of over 11%, largely due to improved energy costs, thereby impacting overall HCl production expenses positively. However, the steel industry saw minimal growth during the month, attributed to a slowdown in construction activity and increased interest rates, which dampened demand. Nucor Corporation, a prominent steel manufacturer in the USA, reported a decline in net sales by 12% in the fourth quarter of 2023 compared to the previous quarter. Similarly, international exports of downstream steel products also dropped by 11% in the same period.

In the UK market, HCl prices followed a similar trend as Germany. High raw material costs and transportation charges drove up HCl prices, while downstream steel prices saw a modest 0.6% improvement despite the previous month’s construction slowdown. Additionally, upstream Caustic soda prices rose due to increased raw material and logistics costs. BASF’s Q4 report highlighted higher import prices from China and transportation complications due to ongoing strikes across European borders.

The Hydrochloric Acid (HCl) market in France closely followed the pricing trend observed in the UK and Germany, experiencing a significant uptick of more than 10%. This surge in HCl prices was primarily driven by heightened demand and the comparatively elevated costs associated with importing materials from the German market. ArcelorMittal, one of the world’s largest steel manufacturers based in Dunkirk, France, released its Q4 and annual report early in February 2024, signaling early signs of improvement within the industry landscape. The company forecasted a 3-4% increase in global steel demand, excluding China, for the year ahead. Despite encountering some rises in insurance expenses, ArcelorMittal indicated that the impact of disruptions in maritime trade, caused by attacks from Yemen’s Houthis in the Red Sea, was relatively minor. While there were some increases in insurance costs associated with these incidents, they did not significantly hinder the company’s operations.

According to ChemAnalyst’s anticipation, it is expected that the price of HCl will experience minimal growth in the upcoming months, attributed to downstream demand, industrial development, production costs, and potential fluctuations in the energy sector, which may exacerbate challenges further.