Nitric Acid Price Surge in Europe and Marginal Decline in North America Due to Diverse Market Dynamics

In the second half of August 2023, Nitric Acid experienced a significant price surge in the European market. However, the prices marginally declined in the North American region. This substantial price increase can be attributed to a combination of factors impacting the industry, including supply chain disruptions, a resurgence in demand from the international market, and an increase in freight charges. Additionally, there was a notable rise in the cost of the crucial feedstock, Ammonia, in Europe, contributing significantly to the overall price escalation. It is worth noting that during the same period, Anhydrous Ammonia prices remained stable in the North American market. Further, the surplus material availability in the USA market also supported the price decline.

In the European region, Nitric Acid and its essential feedstock, Ammonia, saw a substantial and remarkable price increase. This surge in pricing can be linked to the improved performance of the international market. At the beginning of August 2023, Russian fertilizer producers actively entered the US Nitrogenous fertilizer market, attracted by higher local prices and the need to stock up on fertilizers for the upcoming planting season. As the month progressed, Russian producers expanded their sales activities, actively participating in the UK and France markets, with plans to sustain this growth in the coming months.

Moreover, certain disruptive events significantly impacted the fertilizer landscape. A fire in a fertilizer warehouse in Moscow and subsequent damage to 60,000 tons of fertilizer at the Odesa port at the end of July disrupted the supply chain for fertilizers, including Nitric Acid, in the European market. These unforeseen events substantially influenced the observed price surges in the European fertilizer market.

Furthermore, low water levels in the Panama Canal, caused by elevated temperatures, led to delayed imports, resulting in a scarcity of various fertilizers, including Nitric Acid, in the regional market.

Conversely, Nitric Acid prices in the USA market witnessed a decrease. Notably, Minnesota faced severe drought conditions during this period, significantly dropping orders for Nitric Acid. In contrast, the southern region, particularly South Dakota, saw a moderate increase in demand for fertilizers, including Nitric Acid, due to more favorable rainfall conditions. This climatic event contributed to a slight uptick in Nitric Acid demand from the southern region. Further, low water levels in the Panama Canal resulted in delayed exports during this period, leading to an oversupply of the material in the market. This, in turn, eased the price of Nitric Acid marginally in the USA.

According to ChemAnalyst, Nitric Acid prices are expected to increase in the coming months in both the North American and European regions. This anticipated price hike can be attributed to the recovery of demand from end-user markets and a notable increase in the prices of the essential feedstock, Anhydrous Ammonia, as well as upstream Natural Gas prices.