CRU/CESCO-Copper industry's demand for sulphuric acid slumps

By Alexia Vlahos

SANTIAGO, April 2 (Reuters) - Global demand for sulphuric acid, a key ingredient and by-product in copper production, has fallen sharply due to the global financial crisis, and producers will likely to continue to cut back acid output, an industry consultant forecast on Thursday.

World sulphuric acid production fell to 195.8 million tonnes in 2008 compared with 200 million tonnes the previous year, but even so, a surplus of acid built up in the first quarter of 2009 due to lower consumption by the copper industry that has scaled back output and shelved projects.

"Whether you're talking about copper (or) acid, demand is just way below the level it was 12 months ago," Joanne Peacock, research manager at British Sulphur Consultants, told Reuters in an interview at the CRU/Cesco copper conference in Santiago.

"People have made (acid output) cutbacks, but they haven't made sufficient cutbacks to stop the market from going into surplus," she added. "This year ... it's just about finding that equilibrium between supply and demand," she added.

Sulphuric acid is mainly produced by burning elemental sulphur, but it can also be a by-product of the smelting process for copper and zinc, and as such plays an important role in the profitability of smelters. Its main use is in the fertiliser industry.

Copper smelters produce around one tonne of sulphuric acid for each tonne of copper concentrate.

Miners using the solvent extraction and electrowinning process, which accounts for around 17 percent of world copper output, need around 3.0-3.5 tonnes of acid to turn ore into one tonne of copper metal.

State-owned Codelco supplies most of Chile's copper mines with sulphuric acid from its own smelters, but the world's biggest copper producing nation also imports acid.