Thoothukudi Smelter Closure Impacts Sulphuric Acid Pricing; Imports to Rise

With the closure of the Sterlite copper plant at Thoothukudi, the price of sulphuric acid, which has been rising in recent months, may continue its upward march. Sulphuric acid is a critical input for the detergent and fertiliser industries. The price of the acid in Tamil Nadu has risen by nearly Rs. 10,000 a tonne in the last few months, with the going rate prevailing at Rs. 15,000 a tonne. The Sterlite plant had stopped operations in March for maintenance work.

Sterlite, which has a 15% share of the sulphuric acid market in India, annually supplies nearly 6 lakh tonnes of the acid, mostly to detergent, battery, pharmaceutical, industrial and fertiliser units in Tamil Nadu and Puducherry.

According to Mr. S. Ilanahai, President, Chemical Industries Association, and Managing Director of Cetex Petrochemicals, the increase of nearly Rs. 10,000 per tonne over the last few months is worrying. “If we buy 2,000 tonnes, it is an additional cost of Rs. 2-crore, which will wipe out our entire profit. This may be the situation with many others,” he said.

In a communication to the State government, the association has asked the State government to make alternative arrangements for the supply of sulphuric acid as many industries depend on it.

Imports to increase

The closure of the smelter is likely to increase in an increase in imports of sulphuric acid into the country. South Korea producers, for example, have said that the loss of Tuticorin could see them shift volumes to India and away from China.