This year's concentrated nitric acid market has experienced an unusual situation, driven by a combination of rising coal and synthetic ammonia prices, disrupted transportation due to snow disasters, and reduced supply from production cuts. Unlike the usual off-season slowdown, the market has seen strong demand and record-high sales. It is expected that this upward trend will continue in March and April, supported by sustained high production costs.
In February, the mainstream price of concentrated nitric acid climbed from 1,350–1,400 yuan/ton at the end of 2007 to 1,520–1,580 yuan/ton. Although domestic supply increased rapidly toward the end of the month, short-term downward pressure on prices was observed. However, as synthetic ammonia prices surged and production levels dropped again, the market saw another rebound. Currently, the average ex-factory price has reached 1,600–1,700 yuan/ton.
The off-season performance of the concentrated nitric acid market has turned into a peak season, largely due to soaring production costs. Most Chinese producers rely on coal as their main raw material, so rising coal prices have directly pushed up production costs. With recovery in production and daily life in affected areas, and the upcoming spring plowing season, coal supply is expected to remain tight, keeping prices elevated.
Since November last year, both coal and urea prices have been climbing, leading to imbalances in the supply and demand of synthetic ammonia, a key input for nitric acid production. Prices spiked sharply. Although there was a slight drop before the Spring Festival, they quickly rebounded afterward. The domestic price of synthetic ammonia rose from 2,700–2,800 yuan/ton at the end of December to 3,150–3,200 yuan/ton, with further increases likely.
Platinum is the second-largest cost factor after ammonia in the production of concentrated nitric acid. Due to limited platinum resources, its price has remained high. In March, domestic platinum prices reached 505–507 yuan/g, while antimony prices hit 2,390–2,410 yuan/g. Meanwhile, steel prices have also risen sharply, with major steel products increasing by as much as 20%, raising the costs of equipment production and maintenance for nitric acid plants.
The cost increase for concentrated nitric acid doesn't stop there. According to data from the National Bureau of Statistics on February 28, the purchase price of raw materials and fuels rose by 8.9% in January, while the ex-factory price of industrial goods increased by 6.5%. Chemical raw material prices also climbed by 3.8%. Additionally, since the second half of last year, overall social price indices have continued to rise, driving up the costs of consumer goods and basic household items, which has led to higher labor costs for nitric acid companies.
New data from the National Bureau of Statistics on March 11 showed that the national consumer price index rose by 8.7% year-on-year in February, with the cumulative increase from January to February reaching 7.9%. This inflationary pressure is adding to the financial burden of nitric acid producers.
Moreover, with continuous increases in China’s bank interest rates, businesses involved in the purchase and sale of concentrated nitric acid are facing additional financial pressures. To offset rising financing costs, the difference between the interest rate for nitric acid acceptance and spot exchange needs to increase from 20–30 yuan/ton to 50–60 yuan/ton.
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