Sulfur Dioxide          

*Short tons per year of liquid sulfur dioxide. Sulfur dioxide is either produced by burning sulfur or recovered from flue gas, especially at ore smelting (copper, lead or zinc) operations.

Calabrian Corp. added 50 thousand annual tons of new sulfur dioxide capacity to its facility in Port Neches, Tex. during 2003, upping total its total capacity to 150 thousand tons. The company had previously doubled its capacity at this site in 2000, going from 50 thousand to 100 thousand at the time.

In October 2003, Marsulex purchased the sulfur products assets of Duke Energy Gas Transmission at Prince George, British Columbia. The associate sulfur dioxide producing unit has a capacity of 33 thousand tons per year.

In mid-2001 Marsulex created Chemtrade Logistics Income Fund for the acquisition of its sulfur removal services businesses in eastern North America and BCT Chemtrade Corporation, a wholly-owned subsidiary. In addition, Chemtrade Logistics markets sulfur dioxide produced by Inco (Sudbury, Ont.), Falconbridge (Kidd Creek, Ont.) and Marsulex (Prince George, B.C.).

In 2000, Marsulex closed down its Copperhill, Tenn. plant with 45 thousand tons of capacity. The property had been acquired from Intertrade Holdings. In 2001, Clariant Corporation closed its sulfur dioxide plant in Bucks, Alabama with capacity of 65 thousand tons. That same year, Hydrite Chemical Co. closed its 10 thousand short ton-per-year plant at Waterloo, Iowa.

Profile last published 6/19/00; this revision 1/12/04.

DEMAND

2001: 290 thousand short tons; 2002: 300 thousand short tons; 2006: 295 thousand short tons, projected. Demand equals production plus imports (2001: 57 thousand short tons; 2002: 65 thousand short tons) less exports (2001: 3 thousand short tons; 2002: 3 thousand short tons).

GROWTH

Historical (1997 - 2002): -0.3 (negative) percent per year; future: 0 percent per year through 2006.

PRICE

Historical (1997 - 2002): High, $230 per ton, list, liq., bulk, f.o.b. works; low, $230 per ton, same basis. Current: $230 per ton, same basis. Current spot pricing: $130 to $150 per ton, same basis.

USES

Chemicals, 45 percent (sodium hydrosulfite 25 percent, others 20 percent); pulp and paper, 15 percent; food and agriculture (mainly corn processing), 15 percent; water and waste treatment, 10 percent; metal and ore refining, 6 percent; oil recovery and refining, 4 percent; miscellaneous (including sulfonation of oils, and as a reducing agent or antioxidant), 5 percent.

STRENGTH

The principal use of sulfur dioxide has historically been the production of sodium hydrosulfite, which is consumed primarily as a bleaching agent by the textile and the pulp and paper industries and the production of other chemicals. A growing use in the pulp and paper industry is to stabilize mechanical pulp after bleaching with hydrogen peroxide. In this application, sulfur dioxide (or sodium hydrosulfite) acts to maintain the pulp brightness by destroying excess hydrogen peroxide. Of the various sulfur dioxide market segments, the pulp and paper industry has the greatest potential for future growth because of the increasing quantities of paper being recycled—a process requiring bleaching.

Sulfur dioxide is important in the agricultural and food processing markets, where it acts as a preservative, fumigant, bleach and/or steeping agent, depending on the application. Sulfur dioxide is used as an antimicrobial in the manufacture of high-fructose corn syrup, both as-is and as sodium bisulfite from sulfur dioxide.

WEAKNESS

Market growth has been limited by the trend of large consumers to install sulfur burning equipment and generate their own sulfur dioxide on-site as required. This has been the case particularly in corn processing and the pulp & paper industry where one driver is the elimination of stored, liquid sulfur dioxide - a safety issue, particularly in populated areas.

Sulfur dioxide is used in water treatment to destroy the residual chlorine that remains after chlorination of potable water, sewage and industrial wastewater. The application is on the decline in areas that have a policy to restrict or eliminate chlorine.

OUTLOOK

The sulfur dioxide sector has been stable and should remain so even with the modestly increased sulfur prices last year, due to increased fertilizer activity. Industry capacity is more than adequate to meet foreseeable future needs. Most application areas are mature. Where there is growth, paper and foods, industry gains are periodically set back when large consumers begin generating their own requirements by burning sulfur. Demand growth for the forecast period is zero.

HISTORICAL DATA