Nitric Acid Market in China, 2015

By Wang Hongrun, China National Chemical Economic and Technical Development Centre

Supply

At the end of 2015, the capacity to make nitric acid in China amounted to 4.30 million t/a, and the supply amount was 2.77 million tons, a drop of 4.0% from the previous year. The import volume was 41 kt, the export volume was 10 kt, and the apparent consumption was 2.80 million tons. The CAGR of the apparent consumption was 3.5% during 2010-2015. Table 1 shows the capacity of major nitric acid producers in China in 2015.
In addition to major producers listed in Table 1, producers with considerable scale also include Sichuan Lutianhua Co., Ltd., PetroChina Liaoyang Petrochemical Co., Ltd., Dalian Dahua Co., Ltd., Cangzhou Dahua Co., Ltd., Shandong Luguang Chemical Co., Ltd., Zibo Xinyu Chemical Co., Ltd. and Hangzhou Xianjin Fuchun Chemical Co., Ltd. In addition, capacities totally matched to downstream aniline units such as those of Shanxi Tianji, Shanghai Lianheng, Wanhua and Covestro are not listed either. These enterprises have little or no nitric acid for outside sales.
Figure 1 shows the capacity and output of nitric acid in China in recent years.
It is expected that China’s nitric acid capacity will reach 4.50 million t/a in 2017, following a CAGR of 3.7% during 2012-2017.


Table 1   Major nitric acid producers in China, 2015

Province    Producer     Capacity (kt/a)
Anhui    Anhui Huaihua Group Co., Ltd.    400
Shandong    Shandong United Chemical Co., Ltd.    270
Anhui    Anhui Jinhe Industrial Co., Ltd.    250
Shandong    Jinan Chemical Fertilizer Plant Co., Ltd.    200
Jiangsu    Sinopec Nanjing Chemical Industrial Corporation    200
Anhui    Anhui Huatai Chemical Industrial Co., Ltd.    200
Jiangsu    Jiangsu Huaian Daimengte Chemical Co., Ltd.    200
Guangxi    Liuzhou Chemical Industry Co., Ltd.    200
Henan    Henan Yongchang Chemical Co., Ltd.    170
Shandong    Shandong Huayang Dier Chemical Co., Ltd.    170
Gansu    PetroChina Lanzhou Petrochemical Co., Ltd.    150
Jilin    PetroChina Jilin Petrochemical Co., Ltd.    100
Hebei    Hebei Zhongji Zhengyuan Co., Ltd.    100
Shandong    CNOOC Haihua Co., Ltd.    100
Shandong    Qingdao Hengyuan Chemical Co., Ltd.    100
Henan    Henan Jinkai Chemical Investment Holding Group    100
Zhejiang    Hangzhou Longshan Chemical Co., Ltd.    100
Shaanxi    Shaanxi Xinghua Co., Ltd.    100
Total    3 110



Demand

In 2015, China produced 2.77 million tons of nitric acid, a drop of 4.0% from the previous year, and the apparent consumption was 2.80 million tons. The CAGR of apparent consumption during 2010-2015 was 3.5%. Table 2 shows the consumption of nitric acid in China in recent years.
Nitric acid is used extensively in the chemical, metallurgical, pharmaceutical, dyestuff and pesticide sectors. It is used mainly to make ammonium nitrate, nitrophosphate fertilizer, TNT, nitro-cotton, nitrobenzene, nitrochlorobenzene, mononitrotoluene, adipic acid, TDI, MDI, dyestuff intermediates and diesel cetane value accelerator. The consumption mix of concentrated nitric acid in China is roughly 64% for the chemical sector, 20% for the metallurgical sector, 6% for the pharmaceutical sector and 10% for other sectors, as illustrated in Figure 2.
By the end of 2017, China’s consumption of nitric acid is expected to reach 3.00 million tons.

Foreign trade

China imported 41 kt of nitric acid in 2015, a drop of 27.9% from the previous year. The import value was US$10.64 million, a drop of 22.7%; while 9 kt was exported, a drop of 1.7%. The export value was US$4.49 million, a drop of 20.2%.

Table 2   Consumption of nitric acid in China, 2012-2015  (kt)

Year    Output    Import
volume    Export
volume    Apparent consumption    Self-sufficiency rate
(%)
2012    2 625    48    9    2 664    98.5
2013    2 683    104    8    2 779    96.5
2014    2 882    57    10    2 929    98.4
2015    2 768    41    9    2 800    98.9


Table 3   Import/export volume & value of nitric acid by China, 2012-2015

Year    Import    Export
    Volume (kt)    Value (US$ million)    Volume (kt)    Value (US$ million)
2012    48    10.51    14    5.21
2013    104    19.41    8    4.51
2014    57    13.77    10    5.63
2015    41    10.64    9    4.49


The main sources for the import of nitric acid included Korea (96.4% of the total), Taiwan (3.2%) and Japan (0.2%). The region that received the highest volume of imports was Shanghai, taking 96.0% of the total, Jiangsu (3.0%) and Anhui (0.8%) came next.
Table 3 shows the import and export of nitric acid by China in recent years.

Market price

The market price of nitric acid in China fluctuated within a narrow range in 2015. Take the price in Anhui for instance. The highest price, RMB1 250/t, appeared from June to August. The lowest price, RMB950/t, appeared in early September. The average price for the year was RMB1 118/t. Figure 3 shows the price trend of nitric acid in China in 2015.
With overcapacity and low raw material prices in recent years, the nitric acid market in China is fiercely competitive, and the product price has declined steadily. The production/demand balance of the nitric acid sector is by no means favorable, but China will accelerate the mitigation of capacity surplus and resolutely control the total volume. Favorable factors will therefore be offered to nitric acid producers with advanced technology, large scale and considerable regional market demand. China will adjust tariff rates of chemical fertilizers downward during brisk export seasons, facilitating export of nitro-compound fertilizers. Application markets of nitro-compound fertilizers in China will also expand constantly. In this way, great quantities of concentrated nitric acid output can be sold.