Analysis On Impact of Covid-19 On The Global Sulfuric Acid Market
Sulfuric acid refers to the type of strong nature of acid which is manufactured by the oxidizing solutions of the sulfur dioxide that is further used in huge quantities as an industrial as well as a laboratory reagent. Sulfuric acid acts differently in various areas such as in the manufacturing of fertilizers, detergents, pigments, and various other products. Sulfuric acid has a wide range of applications in many industries such as chemical manufacturing, petroleum refining, automotive, textile, and several others areas. Due to the outbreak of COVID-19, the demand for such products has gone down because of the complete lockdown. But the limited production capacities, lack of workers at the factory level, and supply chain interruptions are continuing to cause difficulties for the manufacturers in the market.
Though, the manufacturers are working constantly with the chemical individuals to stabilize the demand for sulfuric acid. The overall sentiment has weakened the interest of the consumers in sulfuric acid consumption. The government and other trade associations are trying to maintain the demand level and thus, have taken various steps that make equilibrium in the demand as well as supply of the sulfuric acid in the market.
AFTERMATH OF COVID-19 AND GOVERNMENT INITIATIVE TO BOOST THE global SULFURIC ACID MARKET
The government has taken various measures to maintain the demand and supply of chemicals and along with that government is also providing the extracting machinery for extraction of sulfur to the manufacturers at a nominal rate. The government is supporting the local producers of sulfuric acid and intermediates which are involved in the production of the sulfuric acid. For this, the government has decided to extend financial and procedural support to domestic companies to kick start local production. The government is considering various stimulus packages to boost the chemical industry.
STRATEGIC DECISIONS FOR MANUFACTURERS AFTER COVID-19 TO GAIN COMPETITIVE MARKET SHARE
Sulfuric acid is also a major part of chemical manufacturing as well as of the petroleum refining industry. The breakout of coronavirus has shaken the entire chemical industry. Due to this pandemic, most of the production got hit and has created a situation of panic in the entire world. Thus, to maintain the demand and supply various strategic decisions are taken for the manufacturers. The local manufacturers are being supported by the government in getting the raw materials at reasonable rates which started availing at higher prices. This step will help the manufacturers to obtain raw materials at reasonable rates and can save huge amounts of loss incurs to manufacturers. Also, the government of various countries has extended support to small and medium enterprises so that dependence on imports can be reduced, and domestic demand can be catered domestically.
Impact on Price
Due to the breakdown of COVID-19 the prices of chemicals such as sulfuric acid, which has reduced gradually, especially post May 2020 as the usage has declined in end-users. In countries, where maximum demand is generated and fulfilled with the local production, a price decrease has impacted the overall market of sulfuric acid. Along with this, the availability of products in huge amounts makes huge stocks which impacted the overall pricing. Along with that, the overall situation has restrained customers from making any buying options until and unless there is any need or urgency.
Impact On Demand
Sulfuric acid has witnessed a dip in the demand in various regions due to weak requirements from end-user in industry especially chemicals, metal refining, and several other industries. Due to the economic and infrastructural slowdown, the demand for these chemicals has decreased which eventually has reduced their consumption. Also the decline in various industrial activities, the demand for industrial materials as well as chemicals has faced major hit. Neither the demand for end-users has shown any upward trend nor the chemicals which are used in them. In this way, the demand for the whole chemical market has been impacted.
Impact on Supply Chain
Due to the outbreak of COVID-19, the supply chain has suffered abruptly. Manufacturers have stocks but they are not getting demand for it. So, there is a situation of oversupply in the market. In this situation, both manufacturers and consumers are facing the timely availability of raw materials.
The restriction over transportation and labor availability is another factor that has affected the supply chain of sulphuric acid. At several parts, manufacturers are struggling for raw material to reach and at the allotted time, some are struggling with delivering the product. Thus, the impact on supply is not due to one factor but is facing a hit from manufacturing points.
Conclusion
The unfortunate event of pandemic has led to a disturbance in the availability and the pricing of sulfuric acid. Though, the imbalance between demand and supply and its impact on pricing is considered to be short-term. Also, with the continuously dropping requirements of automotive, petroleum, refining and many other industries, the manufacturers’ margins are declining which they earn from the supply of sulfuric acid. Though the government is taking steps such as relaxation on tax, fiscal deficit, and others to minimize the impact. These steps will might stabilize the situation of sulfuric acid in future.
