Nitric Acid Prices Surge Globally Amidst Supply Chain Disruption and Reviving Demand

During the first half of August, the fertilizer market, including Nitric Acid, witnessed an escalation in price in the global market. The key factors attributing to the increasing price of Nitic Acid were an upsurge in demand from the downstream industry, increasing price of feedstock Ammonia, and increased freight charges. Consumption of Nitrogenous fertilizers, including Urea and Nitric Acid, increased significantly in India, China, the USA, and Europe during this time frame. 

In the United States, the increase in the cost of nitrogenous fertilizer, including Nitric Acid, was primarily linked to the adjustment in purchasing orders from the global market. Buyers from India re-entered the market to make large-scale acquisitions in preparation for the upcoming winter planting season. Additionally, there has been a slight easing demand for Nitric Acid from the local market. Nevertheless, the ongoing drought and unusually high temperatures in the country have resulted in pest attacks. Further, as indicated by government data, the Producers Price Index of the USA remained stagnant in July after a minor rise of 0.3%, and the index for Chemicals and its allied products decreased by 2.5%.

On the other hand, the European market is currently witnessing a price escalation of Nitric Acid. This Surge can be attributed to the reduced availability of Nitric Acid within the market and a revived demand from global importers. Two incidents involving a fire that was extinguished in a fertilizer warehouse in Moscow resulted in the deterioration of fertilizers in Russia and a blast at Odesa Port in Ukraine, subsequently causing disturbances in the supply chains of Nitric Acid. In July, Germany's producer price index, which gauges the fluctuation in the cost of goods sold by manufacturers, experienced a notable increase of 2% compared to the corresponding month of the previous year.

Similarly, the prices of Nitric Acid have witnessed an increasing trend in China. This upward price movement was primarily influenced by the rising cost of the feedstock Ammonia, even though the price of upstream Thermal Coal remained relatively stable during the same period. On the supply side, manufacturing units were operating comparatively slower, contributing to the market's dynamics. During this timeframe, there was a modest alleviation in procurement orders for Nitric Acid from importing economies. However, the demand from the regional market was subdued due to the passing of the peak sowing season. The current flood situation in the country further dampened buying enthusiasm for Nitric Acid from end-users in the market.

As per ChemAnalyst's analysis, it is anticipated that Nitric Acid prices could continue upward trends in the upcoming months within the global market. This projection is attributed to the rising costs of the essential feedstock, Ammonia, as well as heightened freight charges. Furthermore, the resurgence in demand from end-user segments, such as the fertilizer market, might also contribute to an escalation in global Urea prices.