The COVID-19 pandemic had an adverse effect on the global economy, which includes disruption of the supply chain. Due to lockdown regulations and deficient number of workers, the production in various chemical and other industries declined and the supply of raw materials to the industries decreased. Several countries have been under complete lockdown, many factories running on minimal staffing or even closed temporarily. The levels of activities were very low, and many project schedules changed or postponed. Due to all these interruptions, except the healthcare sector, other end users started delaying non-essential purchases and disengages from the consuming processes by postponing their demands for hydrochloric acid.

- Over the medium term, the major factors driving the growth of the market studied are increasing demand from oil and gas industry and growing demand for pickling in steel industry.

- On the flip side, the pollution and damage to environment and health hazards of HCL is likely to affect the market studied. The HCL in the atmosphere causes atmospheric pollution, acid rain among others and it has short term and long-term effects on human health.

- Asia-Pacific region dominated the global market, followed by North America.

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Key Market Trends

Increasing Demand for Pickling in Steel Industry

- Hydrochloric acid is used in the pickling process in the steel industry. Pickling is a process used for the removal of impurities, such as inorganic contaminants, stains, rust or scale from ferrous metals, copper, precious metals, and aluminum alloys.

- From 1964, hydrochloric acid has replaced sulfuric acid in many steel pickling facilities. Owing to this, the requirement for hydrochloric acid increased from various steel production facilities.

- The steel industry is the major end-user industry of hydrochloric acid. According to world steel association, global crude steel production in the year 2020 has reached 1,864 million tons, down by 0.9% compared to 2019 due to pandemic and is expected to increase during forecast period.

- The major quantity of steel is produced in the Asia-Pacific region, in countries, such as China, Japan, and India.

- China is also projected to remain the largest consumer of iron and steel. The country’s production of crude steel is likely to increase during the forecast period, owing to the recovery in consumption.

- Crude steel production in North America was 101.1 million tons in 2020, down 15.5% on 2019. The United States produced 72.7 million tons in 2020, down 17.2% on 2019. The production is expected to increase in future owing to recovering market conditions post COVID.

- Overall, owing to the aforementioned factors, the market for hydrochloric acid is expected to grow during the forecast period.

Asia-Pacific region dominated the hydrochloric acid market globally

- In the Asia-Pacific region, China is the largest economy in terms of GDP. The country witnessed about 6.1% growth in its GDP during 2019, even after the trade disturbance caused due to its trade war with the United States. The economic growth rate of China in 2020 was initially expected to be moderate as compared to the previous year. However, due to the onset of COVID-19 in 2020, the economic growth of China is estimated to contract to some extent and is expected to witness recovery in 2021.

- In oil and gas industry, HCL is commonly used in the stimulation of oil and gas wells, particularly in carbonate formations. With increasing demand in countries, like China and India, oil and gas companies are planning on expanding their manufacturing activities, resulting in the increased consumption of hydrochloric acid.

- In 2019, the Asia-Pacific region produced oil (crude oil, shale oil, oil sands and NGLs) around 7.65 million barrels daily (1,043.65 thousand tons daily).

- Steel industry is one of the major end-user industry of hydrochloric acid. The major quantity of steel is produced in the Asia-Pacific region, in countries, such as China, Japan, and India. Asia produced 1,374.9 million tons of crude steel in 2020, an increase of 1.5% compared to 2019. China's crude steel production in 2020 reached 1,053 million tons, up by 5.2% in 2019. Japans crude steel production in 2020 reached 83.2 million tons and is decreased compared to 99.3 million tons in 2019.

- India is a growing economy and holds great potential for future market opportunities. The country witnessed a negative GDP growth rate of -10.3% in 2020, from 4.2% in 2019. The COVID-19 outbreak persists in the first quarter of 2021 as well, which, in turn, is expected to continue affecting the overall production, employment, income and demand scenario in the country during 2021.

- With a growing population in India, developments are taking place in the industries, such as food, chemical, and textile, thereby increasing the market for hydrochloric acid.

- Moreover, the country’s government has been taking initiatives to attract FDI in the manufacturing sector, in order to make India a manufacturing hub. The government is targeting an increase in the GDP share of the manufacturing sector, from 16% to 25%, by 2022.

- Owing to the impact of COVID-19, the region has witnessed decline in 2020, due to the slowdown in almost all the end-user idnsutries except healthcare. However, recovery is expected in 2021 and the market for hydrochloric acid in the region is expected to have a high growth during the forecast period.

Competitive Landscape

The hydrochloric acid market is fragmented in nature. Some of the major players in the market include Solvay, BASF SE, AGC Chemicals, Occidental Petroleum Corporation, and ERCO Worldwide among others.

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