Hydrochloric acid (HCl) supply, also known as muriatic acid, will probably tighten this year, causing prices of this commodity chemical to edge upward, according to industry estimates. But no one is expecting any dramatic HCl shortages or price hikes.

Key trends in the hydrochloric acid industry—which includes hydrogen chloride, the anhydrous form of the acid—are the pipelining of more HCl gas from producers to consumers, growing recycling of the acid by the steel industry, and more recovery and re-use of the acid by producers who make it as a byproduct of their own operations.

Up to 95% of HCl produced in most regions of the world is a byproduct of chlorine-consuming chemical processes. These processes include production of isocyanates (polyurethane starting materials), magnesium chloride, methyl chloride, and fluorocarbon refrigerants and blowing agents. But the largest byproduct source of HCl stems from production of vinyl chloride monomer (VCM), the raw material for PVC. According to Chemical Market Associates Inc. (CMAI), Houston, Texas, about 64% of last year's 7.2 million metric tons of HCl produced in the U.S. was derived from plants that made VCM from ethylene dichloride (EDC), the reaction product of ethylene and chlorine. All this HCl, however, was used captively to make more EDC and VCM, so it never reached the merchant market.

In fact, the lion's share of HCl is consumed captively and stays off the merchant market, which CMAI estimates to comprise only about 20% of U.S. HCl consumption. About a third of the HCl available on the merchant market comes from burning chlorine in hydrogen gas. The rest derives from various byproduct sources. HCl is usually consumed in or near the country in which it is made. There is little international shipping of the acid due to high freight costs. Major producers of HCl in North America are Dow Chemical, Bayer, BASF, Rubicon (a Crompton-Huntsman joint venture) and Vulcan Chemicals.

About 23% of HCl on the merchant market goes into food applications, while another 20% is used for making calcium chloride, CMAI reports. Other leading applications of the merchant acid include steel pickling, with 14% of the market; brine treating, 12%; oil-well acidizing, 12%; and deep-well injection, 6%. Miscellaneous applications—including water treatment and semiconductor processing—make up the remainder of the market.

Demand growth for HCl in the U.S. has recently been around 0.5% per year, according to Steven Brien, business director, chlor-alkali and vinyls, at CMAI , while production of HCl from byproduct sources like isocyanates has been surging at 3-5% annually, he adds. "The isocyanate producers know that if they want to expand their operations they have to do something with all that HCl," Brien says. Increasingly, he explains, the solution is for the isocyanate producers to pipeline their excess HCl to EDC and VCM plants. For example, he notes that isocyanate producers such as Bayer, Rubicon, BASF, and Dow have begun pipelining their byproduct HCl to neighboring EDC facilities. Vulcan Chemicals, Birmingham, Ala., sells chlorine to isocyanate producers, buys back their byproduct HCl, and, in a joint venture with Mitsui & Co., uses the HCl to make EDC for international markets.

Demand for HCl in steel pickling has been dropping, mainly due to increased recycling of HCl by steel producers. Brien estimates the U.S. steel industry used about 20% less acid in 2001 than in 1999 due to recycling. However, Mike Dye, VP, marketing and sales at Vulcan says that "the steel industry hasn't found [HCl] recycling to be the panacea they though it would be," and believes the recycling trend has run its course.

Overall demand for HCl is forecast to grow at an average annual rate of 0.7% in the U.S. through 2005, according to CMAI.

Prices for HCl have been relatively flat during the past year, with a slight oversupply of the acid, but several trends could mean tightness in the market and escalating tags for the acid. Chlorine prices are likely to rise later in 2002, Brien says, which may induce producers of "burner" HCl (from chlorine and hydrogen) to sell their chlorine directly and convert less of it to HCl. Meanwhile, Dow, which recovered and reused some four billion lbs of HCl last year, says it will escalate internal recycling of its byproduct HCl, which would make less HCl available to the merchant market. More byproduct HCl will also be pipelined over the next few years, Brien advises, a trend he believes will further constrict supplies of the acid to the merchant market. "Right now, the HCl market is set to go from balanced to tight," Brien says, "which will cause prices to edge up in the second half of the year."

Dye also sees a slight climb in prices this year, but, like Brien, he declines to speculate on its magnitude. However, he believes the tightness in the market will quickly resolve itself. "Usually when you get an imbalance" in HCl, he says, "the industry finds a way to make more product available."