Hydrochloric acid: Cycles

When chlorine is weak, acid floods the market

HCl prices are local and low. They move with chlor-alkali and isocyanate operating rates (supply) and with steel and drilling activity (demand). When chlorine demand is weak, chlor-alkali plants burn more chlorine to HCl and flood the market; when plants go down for maintenance, acid tightens quickly. The floor can be negative (producers pay to have acid removed); the ceiling is set by the cost of synthesising acid from chlorine, or by sulphuric acid substitution.

Direct synthesis converts 0.97 t chlorine into 1 t HCl (100%), about 3 t of 33% acid. If 33% acid sells for $50/t, the chlorine netback is about $150/t of chlorine (indicative), which can beat negative merchant chlorine.

Booms and busts

1. 2021-2022

   European chlor-alkali and isocyanate cuts during the energy crisis tightened acid supply while US drilling recovered.

   not published here

2. Q1 2026

   Chinese supply was ample and steel weak; prices slid.

   China spot fell from about RMB 0.11/kg to RMB 0.09/kg, down about 18% (Procurement Resource)

3. Q2 2026

   More than 5 Mt of Chinese chlor-alkali capacity went into maintenance in May-June; supply fell.

   China about RMB 0.11/kg in April to RMB 0.15/kg in May, up about 33%; US about $152/t to $142/t (Procurement Resource)

4. Q3 2026

   US steel and drilling demand supported prices; China eased.

   Aug 2026: China FOB $26.80/t, US FOB $162.40/t, Germany CIF $120.40/t, India CIF $135.00/t, Japan CIF $61.12/t (Procurement Resource)

What drives the cycle

• Chlor-alkali operating rates. set by-product and synthesis supply
• Isocyanate output. MDI and TDI plants are the largest by-product sources
• Steel output. pickling is a major outlet
• Oil and gas drilling. well acidising drives US demand

Metrics to track