The global Nitric Acid market unfolded bearish market sentiments during the first half of January 2024. This price dip is primarily attributed with muted demand of the material from various end-user industries, diminished demand of essential downstream derivatives including Glyoxylic Acid, Aniline, Adipic Acid etc. Further, declining price of essential feedstock Ammonia prompted towards lower production cost consequently exerting downward cost pressure on Nitric Acid prices.

The European Nitric Acid market experienced downward trend during the first half of January 2024. This dip is primarily linked to subdued demand from the prominent downstream fertilizer sector. Adverse weather conditions in the European countries including UK, France, and Germany further exacerbated the situation. The impact of adverse weather poses a potential threat to the demand for Nitric Acid in fertilizers in 2024. Despite the conclusion of the winter planting season, the inventory of Nitric Acid has not been depleted to the anticipated extent due to continuous wet weather conditions. Further, demand for essential downstream derivative Aniline remained muted from automotive industry. As per data released from German Federal Motor Vehicle Office the New Passenger Car registration declined by 23% in December 2023 on year-on-year basis and is expected to decline in January 2024 amidst the early withdrawal of the environmental bonus for electric vehicle (EV) purchases. Furthermore, demand from another downstream derivative Glyoxylic Acid remained restricted from cosmetics and haircare industry post festive season.

Similarly, the Nitric Acid market in the United States exhibited bearish sentiments during the first half of January 2024. This price dip is primarily attributed to the surplus availability of material within the market coupled with lacklustre demand in both international and domestic markets, exacerbated by significant stockpiles within the nation. Prolonged drought conditions at the Panama Canal, a critical global trade route originating in the USA, have contributed to this scenario. Further, some major shipping companies have opted for alternative trade routes instead of the Suez Canal due to concerns about potential rebel attacks. The limitations at the Panama Canal have compelled certain shippers to reroute exports, including Nitric Acid, through the Suez Canal to access Asian markets. If constraints at the Suez Canal persist, exporting Nitric Acid from the US may become increasingly difficult, potentially leading to an oversupply in the domestic market and subsequent price reduction. The accumulation of Nitric Acid inventories within the country has been exacerbated by delayed shipments to the international market. Furthermore, the demand for Nitric Acid from one of the prominent end-user fertilizer market remained subdued in the United States, aligning with the conclusion of the peak fertilizer season. Additionally, demand for essential downstream derivative Glyoxylic Acid remained restricted during this period from the domestic cosmetics and haircare market as the festive season within the country has passed exerting downward cost pressure on Nitric Acid prices. The interplay of these factors prompted towards narrowed gap between demand and supply thus supporting the current price dip.

As anticipated by ChemAnalyst, an increase in Nitric Acid prices is anticipated in the global market in the coming months. This surge is primarily attributed to a revival in demand from the crucial downstream fertilizer sector.