Analysis on the Rebounding Nitric Acid Market

Introduction: After the Qingming Festival, the Chinese concentrated nitric acid market continued the downtrend. With the production cost pressure, some producers’ ex-works prices were lower than the cost. At the end of April, producers stopped production to ease the inventory pressure. The nitric acid market got slightly warm.

From the chart above, the Chinese concentrated nitric acid market continued the downtrend. Prices declined by RMB 100-125/mt. Some producers’ ex-works prices were lower than the cost. The downstream demand was weak and producers had to cut down prices to promote sales. At the end of April, some producers suffered great losses. Some large-sized producers in Shangdong, Jiangsu, Anhui, etc. were expected to be shut for a week. Nitric acid prices moved up RMB 100/mt. The mainstream negotiation prices for 98% nitric acid were around RMB 1,462/mt, down 4.07% month on month. According to ECHEMI, liquid Ammonia prices inched down. At the end of April, the Chinese nitric acid market will be stable and thin on the maintenance.

From the above table, the co-movement between concentrated nitric acid and liquid ammonia was strong. The aniline market moved up and the acceptability to high-priced nitric acid was modest. 

The 100kt/a aniline unit at Nanjing Chemical was shut on April 20. Operating rates of TDI units in BASF Shanghai, Covestro and Southest Electrochemical moved down. The demand from other fields remained weak.

On the whole, it is hard for the concentrated nitric acid market to move. Liquid ammonia prices are high and the profits of aniline and TDI are satisfactory. Players are bullish about the nitric acid market and the intensive shutdown will support the nitric acid market in the short term. It is predicted that the Chinese concentrated nitric acid market prices will move up by RMB 50/mt.