Soaring Feedstock Nitric Acid Prices Signal Imminent Surge in Sodium Nitrate Costs Globally

In a development with far-reaching consequences for various industries, the Nitric Acid market in China is experiencing a seismic shift that could significantly impact the prices of Sodium Nitrate in the upcoming months of 2023. Nitric Acid, a fundamental component in the production of Sodium Nitrate, is witnessing an unprecedented price surge due to a confluence of factors, creating a ripple effect throughout the supply chain.

The looming increase in Sodium Nitrate prices can be attributed primarily to the significant rise in Nitric Acid prices in China. Recent reports indicate that Nitric Acid prices have surged by an astonishing percentage in the past month, surprising industry experts. As a result, manufacturers have raised their prices, and market activities have been robust. On the supply side, acid companies have maintained low factory inventories, leading to tight supply conditions. Shipments have predominantly focused on fulfilling orders, further bolstering the price appreciation of Sodium Nitrate. From September 1 to September 27, the cost of upstream liquid Ammonia has increased by 0.19%, while downstream aniline has seen a substantial 20.74% price increase, providing additional cost support to the Sodium Nitrate market. The overall market demand has rebounded, with a shift in focus towards the acid market's higher end, and there has been increased activity in downstream trading. However, China's new export policy has reduced fertilizer exports, and production activities have been affected by the upcoming mid-autumn festival in the country. Concurrently, the Hangzhou Asian Games and the impending eight-day Mid-Autumn Festival and National Day holiday period are expected to stimulate China's consumer market, with the tourism sector reaching its peak. During this holiday season, prices will likely rise as production activities are halted. Manufacturing facilities are operating at reduced capacities, leading to a shortage of Nitric Acid and Sodium Nitrate in the domestic market. After these events conclude, production will be ramped up to meet the increased demand and fulfill large orders for inventory replenishment. Consequently, the surge in production costs and manufacturing rates will naturally result in higher prices for Sodium Nitrate.

Similarly, Sodium Nitrate prices in the European region saw an uptick, coinciding with a significant rise in Nitric Acid prices in late September, which continues to persist. This period also experienced challenges with Norwegian offshore gas facilities, resulting in reduced gas supply to the US Gulf Coast and subsequently driving up Natural gas prices, negatively impacting both Nitric Acid and Sodium Nitrate prices. On the demand side, procurement orders from the regional market remained strong during this timeframe, with consumers actively increasing their stockpiles in anticipation of an upcoming surge in demand from the spot market. Additionally, due to rising inflationary pressures, manufacturing facilities operated at reduced capacity, leading to a shortage of Sodium Nitrate in the market.

The anticipated price hike in Sodium Nitrate for October 2023 presents a multifaceted issue arising from supply chain disruptions, heightened demand, and escalating raw material costs affecting various industries.