Hydrochloric acid is an aqueous solution of hydrogen chloride gas. It is produced primarily by four basic methods: the chlorination of organic chemicals; the combination of hydrogen and chlorine; the salt-sulfuric acid production process; and, as a co-product in the manufacture of silica. In most cases, hydrochloric acid is produced from the chlorination of organic chemicals with much smaller amounts derived from the other processes. Most of the hydrochloric acid produced in the U.S., Europe, and Japan is generated as a by-product in the manufacture of a wide variety of organic chemicals via chlorination reactions. This supply depends largely on demand for the primary products. A significant amount of by-product hydrochloric acid is generated when ethylene dichloride (EDC) is cracked to make vinyl chloride monomer (VCM). This hydrochloric acid is usually recycled back to the EDC reactor for additional oxychlorination and for the most part, does not enter the commercial market. Similarly, most of the hydrochloric acid generated in the production of chlorinated C1s (primarily methylene chloride and chloroform) is recycled to produce additional methyl chloride.
The global hydrochloric acid market is valued at USD 1 billion in 2020 and it is expected to grow at a CAGR of 5% from 2021 to 2027 due to increasing demand from food processing and oil & gas industries. Globally, nearly 37% of all hydrochloric acid consumption is for the production of EDC, and 61% is used in the production of organic compounds, most of which is captive consumption. The remaining consumption is in several inorganic or merchant applications. APAC is leading the global hydrochloric acid market in terms of consumption due to rapid industrial expansion in China, Indonesia, and India. China is expected to witness the fastest growth due to rising ore processing, calcium chloride & ethyl dichloride production, oil & gas industry over the forecast period.
Hydrochloric acid can be produced as a by-product for about 40 chemical processes across multiple industries. Hence, the fixed cost of chemical processing including material costs, equipment costs, maintenance costs considered as the major cost drivers of hydrochloric acid production. Moreover, suppliers try to reduce variable costs by outsourcing the production activity in low-cost sourcing destinations like India and China. As these countries offer cheap labor, it significantly reduces the overall cost of one unit of hydrochloric acid production and increases the profit margin.
The global hydrochloric acid industry is negatively impacted since the beginning of the COVID-19 pandemic. Major hydrochloric acid consumers like India and China were forced to a temporary halt on major industrial manufacturing activities. This resulted in a decrease in the production of hydrochloric acid. Furthermore, hydrochloric acid can cause severe burns on the skin and eyes, due to which, its cost of handling and storage is comparatively higher than other key industrial chemicals. The rise of stringent environmental regulations due to hazardous side effects of hydrochloric acid production is becoming a major challenge in the global hydrochloric acid industry.
Solvay, BASF SE, AGC Chemicals, Occidental Petroleum Corporation, DoW, Covestro, PCC Group, and ERCO Worldwide are some of the key suppliers of hydrochloric acid. The hydrochloric acid market features a highly fragmented landscape with the industry leaders contributing less than 20% of the market share. Leading suppliers are strengthening their presence through multiple mergers and acquisitions. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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