The US Nitric Acid Price Trend Contradicts with Europe in November 2023 as Market Situation Differs

The European Nitric Acid market experienced a significant increase in November 2023, mainly due to a shortage of the product and its crucial feedstock in the regional market, spurred by disruptions in the supply chain. The elevated prices can also be attributed to the increased costs of essential raw material Ammonia, leading to higher production costs for Nitric Acid. In contrast, prices in the North America decreased during the same period due to reduced demand for the material in both domestic and regional markets.

Throughout November 2023, Nitric Acid prices in the Europe experienced a substantial increase, driven by a convergence of factors affecting the fertilizer market. One major contributor to this surge was the significant rise in the costs of crucial raw material Ammonia. Further, a severe shortage of imported raw material was observed in the European market amidst declined exports from USA. Persistent bottlenecks at the Panama Canal introduced additional complexities, leading to extended queues for ships. These disruptions have not only impacted shipping schedules but also resulted in a subsequent increase in transportation costs, directly affecting the flow of Nitric Acid shipments into the European market. Additionally, the cautious stance adopted by producers, influenced by rising costs and logistical challenges, contributed to a decrease in Nitric Acid exports from the USA to Europe. The supply dynamics received an additional layer of complexity with Yara, a Norwegian chemicals company, announcing a temporary two-month cessation in the production of Ammonia and its derivatives, including Nitric Acid. This announcement has the potential to generate a surge in spot demand for volumes, further worsening the existing shortage of Nitric Acid in the European market. Moreover, firm demand of downstream derivative Adipic Acid from end-user automotive industry exerted upward cost pressure on Nitric Acid prices.  The culmination of these factors has widened the gap between demand and supply in the European fertilizer market, creating a robust support base for the heightened pricing of Nitric Acid.

In contrast, the Nitric Acid market experienced a downturn in the United States. The impact of cost pressures from crucial raw materials such as Ammonia on Nitric Acid prices was limited during this period. The demand for Nitric Acid remained subdued in the domestic market due to the conclusion of the peak fertilizer season within the country. Additionally, a weakened demand for essential downstream derivatives, namely Aniline and Adipic Acid, exerted downward pressure on Nitric Acid prices. Moreover, the market faced surplus availability of material, exacerbated by persistent bottlenecks in the Panama Canal, a crucial global trading route from the USA. This resulted in delayed shipments to the international market and an accumulation of inventories within the country. The combination of reduced demand and increased supply contributed to a narrowing gap between demand and supply, thereby supporting the prevailing decline in prices.

As per ChemAnalyst, there is an expectation of a slight rise in Nitric Acid prices in the coming months. This projection is rooted in the upward movement of feedstock prices and the possibility of supply shortages. The interplay of these factors is anticipated to lead to a gradual upward trajectory in Nitric Acid prices, aligning with the broader dynamics and conditions prevalent in the market.