Global Nitric Acid Prices Show Marginal Uptick in September 2023 Amidst Reviving Demand

Throughout September 2023, Nitric Acid prices experienced a slight uptick in the global market. This substantial price hike is attributed to a combination of factors, including increasing upstream prices, a significant revision in demand from the international market, and supply chain disturbances.

Nitric Acid prices in the European region witnessed a substantial increase during September. This price escalation can be primarily attributed to the rising costs of essential inputs such as Ammonia and upstream Natural gas. During this time period, issues arose with Norwegian offshore gas facilities. Less gas going to the US Gulf Coast increased Natural gas prices. Consequently, this leads to Ammonia producers in Europe feeling more pressure to buy gas from other countries instead of making it themselves. In terms of demand, procurement orders from the regional market remained robust during this timeframe. Consumers were actively increasing their inventories in anticipation of the forthcoming planting season for Wheat, Rye, and Barley within the local area. Furthermore, in the face of mounting inflationary pressures, manufacturing facilities operated at reduced capacity, leading to a scarcity of materials within the market. Furthermore, there was a current shortage of spot availability in the Nitric Acid market because producers were primarily focused on meeting existing supply contracts, exacerbating the supply situation.

Moreover, this month, Russia imposed export duties on Nitrogenous fertilizers, including Nitric Acid, supporting the current price trend.

Similarly, in the Asian market, the Nitric Acid market witnessed an uptick in prices. Nitric Acid prices increased by a margin of 5% in China during September 2023. This price escalation is mainly attributed to the increasing price of vital feedstock Ammonia and firm demand from the downstream fertilizer sector. Domestic consumers are actively stocking up for Wheat and Barley planting season in October 2023 and November 2023. This week, demand for Nitric Acid from the international market was also stable. However, the new export policy in China has reduced exports of fertilizers. Further, production activities have been impacted by the forthcoming mid-autumn festival within the country. Manufacturing units are operating at a reduced rate, leading to a shortage of Nitric Acid within the domestic market.

On the other hand, Nitric Acid prices exhibited stability in the North American region during September 2023. In terms of Nitric Acid demand, procurement orders from domestic and international fertilizer markets were firm during the beginning of September 2023 amidst the forthcoming winter planting season. However, fewer inquiries from the international market, particularly Brazil, were observed as the month ended. Buyers' resistance to making bulk purchases is forcing import prices to decline, and it seems that this trend will continue, weakening the Western market. Regarding the supply aspect, an adequate quantity of materials was available in the market to meet end-users requirements. These factors collectively prompted a balanced gap between demand and supply.

Furthermore, according to data from the Bureau of Labor Statistics, the country's Consumer Price Index (CPI) experienced a 0.6% increase in August, accompanied by a 0.1% uptick in the Natural gas index.

As per ChemAnalyst, Nitric Acid prices are anticipated to increase globally in the forthcoming months. The price rise can be attributed to the heightened costs of feedstock Ammonia and upstream Natural gas. Additionally, the downstream fertilizer sector anticipates a modest uptick in demand.