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Concentrated nitric acid market continues to consolidate
In August, the domestic concentrated nitric acid market remained relatively stable, with no significant price improvements expected. However, market analysts anticipated that September would bring continued volatility and consolidation as supply and demand dynamics adjusted.
During August, several major nitric acid producers scheduled maintenance or shutdowns, which had a noticeable impact on the market. Among them, Anhui Huaihua Group Co., Ltd., one of the largest concentrated nitric acid manufacturers in China, saw its third plant fully operational, producing over 30,000 tons per month and accounting for approximately 22% of the national market. The company’s maintenance period significantly reduced supply, causing a sharp drop in available inventory. Additionally, extreme summer heat and low production capacity contributed to a slight price increase in concentrated nitric acid. Some industry players even predicted a potential price surge in August, with some Shandong-based companies preparing for a favorable market.
According to reports, several key companies implemented planned shutdowns in August: Anhui Huaihua Group started maintenance a week early on August 16; PetroChina Lanzhou Petrochemical Company conducted a one-month safety inspection in early August; Hubei Jinyuan Chemical Industry shut down for a week on August 10; Liuzhou Chemical reduced output by 30% for a week due to equipment issues; and Shandong Huayang Pesticide Chemicals suspended operations for about a week at the end of the month.
Despite the supply reduction, many nitric acid producers did not face significant pressure in sourcing raw materials, and the hoped-for market rebound did not materialize. Analysts identified three main reasons for this unexpected situation.
First, downstream demand remained weak, particularly in the aniline sector. Several new aniline plants, such as Jiangsu Shuangliang Group's 50,000-ton/year facility, PetroChina Lanzhou's 100,000-ton/year plant, and Jilin Petrochemical's 136,000-ton/year plant, failed to stimulate strong demand. Second, the number of production halts was high, but most lasted only a week, limiting the overall impact. In June, national concentrated nitric acid output rose by 5.7% year-on-year, and in July, it increased by 18.1%, showing a clear upward trend. New production facilities, like those added by Anhui Huatai and Anhui Huaihua Group, further expanded supply, dampening market confidence.
Industry experts noted that last year’s market was distorted, with prices far above their intrinsic value and excessive profits attracting too many new entrants, leading to overcapacity. This year’s price decline is a natural correction to the oversupply issue. After a period of adjustment, the market bottomed out in July and August, and analysts expect continued volatility into September.
Market insiders emphasized that without a thorough shakeout, prices will not return to normal levels. Only through repeated market corrections—eliminating inefficient producers with high costs and weak risk management—can the concentrated nitric acid market finally stabilize and return to its true value.