Up to the end of 2015, the nitric acid
capacity in China was 4.3 million t/a, with the output of 2.798 million tonnes
in 2015, down 4% YoY. As the necessary raw material for the production of nitrate
salt and nitrate, nitric acid is used to produce nitrates nitrogen fertilizers
such as ammonium nitrate and potassium nitrate. In the past few years, the
overcapacity in the industry, low price of raw materials and declining product
prices have kept bothering the development of the nitric acid industry.
![](http://www.cnchemicals.com/Webdata/WebResources/image/20160922/20160922095526_0309.jpg)
Source: Bing
Analysis
and prospect on supply
Up to the end of 2015, the nitric acid
capacity in China was 4.3 million t/a, with the output of 2.798 million tonnes
in 2015, down 4% YoY. The import volume of nitric acid was 41,000 tonnes;
export volume, 10,000 tonnes; and apparent consumption, 2.8 million tonnes,
with the CAGR of 3.5% in 2010-2015.
The location of concentrated nitric acid
was almost the same as what it was 10 years ago. The output of concentrated
nitric acid in Anhui, Jiangsu, Shandong, Henan and Zhejiang ranked top in
China, with the altogether concentrated nitric acid capacity in the above five
provinces accounting for over 70% of the total capacity in China.
Due to too many similar products in the
downstream market and over expansion on the capacity, the market demand became
saturated with overcapacity, overstocking of the products. Some enterprises
were even forced to suspend some under construction projects, which brought
loss for the enterprises.
It is predicted that the nitric acid
capacity would reach 4.5 million t/a in 2017, with the CAGR of 3.7% in
2012-2017.
Analysis
and prospect on demand
In 2015, the nitric acid output was 2.768
million tonnes, down 4% YoY. The apparent consumption of nitric acid reached
2.8 million tonnes with the CAGR of 3.5% in 2010-2015.
Nitric acid is one of the most important
products in basic chemical industry, which is widely applied in chemicals, metallurgy,
medicine, dye and pesticides industries. As for the consumption structure of concentrated
nitric acid in China, about 64% of the concentrated nitric acid was consumed in
chemical industry; about 20%, in metallurgy industry; about 6%, in medicine industry;
and about 10% in other industries.
It is predicted that the nitric acid
consumption would reach 3 million tonnes in 2017. The beneficial governmental
policies would support the demand in nitric acid market and the output in the
downstream market would be stable.
Analysis
and prospect on import and export
The import and export volume of concentrated
nitric acid was not much in China due to its specialty in transportation. China
is a net import country in concentrated nitric acid, with the import dependence
rate of only 1.5% in 2015.
The import volume of nitric acid was 41,000
tonnes in 2015, down 27.9% YoY, with the import value of USD10.643 million,
down 22.7% YoY. The export volume was 9,000 tonnes in 2015, down 1.7% YoY, with
the export value of USD4.493 million, down 20.2% YoY.
Nitric acid is imported in China through
general trade, with the trading volume of 40,000 tonnes, accounting for 98.5%
of the total import volume. Nitric acid is mainly imported from South Korea
(96.4%), Taiwan China (3.2%) and Japan (0.2%). Shanghai imported the most nitric
acid in China, accounting for 96% of the total import volume, followed by
Jiangsu (3%) and Anhui (0.8%).
In 2015, China only exported 9,000 tonnes
of nitric acid.
Statistic of nitric acid consumption in 2012-2015 (Unit:
ten thousand tonnes, %)
Year
|
Output
|
Import volume
|
Export volume
|
Apparent consumption
|
Self-sufficiency rate
|
2012
|
262.5
|
4.8
|
0.9
|
266.4
|
98.5
|
2013
|
268.3
|
10.4
|
0.8
|
277.9
|
96.5
|
2014
|
288.2
|
5.7
|
1
|
292.9
|
9.4
|
2015
|
276.8
|
4.1
|
0.9
|
280
|
98.9
|
Statistic
of nitric acid import and export in 2012-2015 (Unit: ten thousand tonnes, billion
USD)
Year
|
Import
|
Export
|
Volume
|
Value
|
Volume
|
Value
|
2012
|
4.8
|
1051.4
|
1.4
|
521.3
|
2013
|
10.4
|
1940.8
|
0.8
|
451.4
|
2014
|
5.7
|
1376.8
|
1.0
|
563.4
|
2015
|
4.1
|
1064.3
|
0.9
|
449.3
|
Analysis
and prospect on market price
The nitric acid market price showed a
slight fluctuation in China 2015. Take the market price in Anhui as an example,
the highest nitric acid price of RMB1,250/t appeared in June to Aug. and the
lowest price of RMB950/t showed up in Sep. The average price in 2015 was
RMB1,118/t, with RMB132/t up most and RMB168/t down most.
In the past few years, the overcapacity in
the industry, low price of raw materials and declining product prices have kept
bothering the development of the nitric acid industry. In addition, the Tianjin
explosion happened in Aug. 12 in 2015 has shadowed the industry because the
Chinese government is putting pressure on the inspection on nitric acid and its
downstream hazardous chemicals. Currently, the nitric acid industry is facing
four difficulties in its development.
First, it is the overcapacity. Up to the
end of 2015, the nitric acid capacity in China was 4.3 million t/a. Due to too
many similar products in the downstream market and over expansion on the
capacity, the market demand became saturated with overcapacity, overstocking of
the products. Some enterprises were even forced to suspend some under
construction projects, which brought loss for the enterprises.
Second, it is hard to raise quotation. The
overcapacity resulted in price wars among all the enterprises. The expanding
capacity has caused low price of nitric acid. Especially in hot seasons, due to
the maintenance or suspension of its downstream ammonium nitrate producers, some
manufacturers would reduce its profits to capture the market.
Third, weak demand due to strict inspection.
Ammonium nitrate, which takes up 47% of the total consumption in nitric acid,
is mainly used to produce explosive. After the explosion in Tianjin last year,
some manufacturers suspended their production on ammonium nitrate. The downstream
enterprises were also very cautious in purchasing ammonium nitrate.
Forth, weak support from raw material. The
declining prices of both coal and natural gas are not able to support the product
prices.
*The
article is edited and translated by CCM. The original one comes from Economic Analysis of China Petroleum and
Chemical Industry.
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