Market Trends of Nitric Acid Industry
Increasing Demand from the Fertilizer Industry
- Nitric acid reacts with ammonia or other nitrogenous compounds to form nitrate salts, which are essential components of fertilizers like ammonium nitrate, calcium nitrate, and potassium nitrate. These fertilizers provide readily available nitrogen to plants, enhancing their growth and yield.
- Over 80% of nitric acid is used in manufacturing fertilizers. Fertilizers, like ammonium nitrate and calcium ammonium nitrate, are produced from nitric acid. To meet the increasing global food demand, more arable land is required for cultivation.
- Ammonium nitrate is a popular, efficient nitrogen-based fertilizer with around 35% (by mass) of total nitrogen content. Moreover, calcium ammonium nitrate (CAN) fertilizer has a nitrogen content of ~25-28%. CAN fertilizer is used to supply nitrogen to advance the growth of any plant.
- Calcium ammonium nitrate is manufactured by mixing molten ammonium nitrate and calcium carbonate at a temperature of around 170°C. It is hygroscopic and can absorb moisture from the environment. Thus, calcium ammonium nitrate can be used in soil without sufficient water.
- According to the USDA Foreign Agricultural Service, China, Russia, the United States, India, and Canada produce more than 60% of the world’s fertilizer nutrients combined. Russia and the United States each produce less than 10% of global fertilizers, while China produces approximately 25%.
- In September 2022, the US government announced programs worth USD 500 million to boost domestic fertilizer production, and the European Union is being urged to take similar action. Canada, already the world's largest supplier of potash fertilizers, announced in November 2022 that it will boost its fertilizer exports by 20% annually, filling a gap left by blocked shipments from other countries.
- According to the International Fertilizer Association (IFA), China is the largest user of fertilizer, consuming nearly one-quarter of global fertilizer supplies. In 2022, a total of 55.7 million tons of NPK fertilizer was produced in China. This was 55.44 million tons in 2021 and 54.96 million tons in 2020.
- According to FERTILIZERS EUROPE, annual nitrogen fertilizer consumption in the European Union is expected to reach 10.6 million tons by the 2029/2030 season, compared to the current average of 11.2 million tons. After several years of recovery, annual fertilizer consumption over the next ten years is foreseen to decrease for the fourth consecutive year, thereby restricting market growth.
- Thus, the factors mentioned above are likely to affect the nitric acid market for fertilizer application during the forecast period.
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Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to be the dominant market in nitric acid production, owing to the largest production and consumption of fertilizers in Asia-Pacific countries, including China, India, and South Korea.
- For instance, in 2022, according to the survey conducted by the International Fertilizer Industry Association and the 2023 Fact Book published report by Nutrien, the Asia-Pacific region accounted for the highest volume of consumption of agricultural fertilizer worldwide.
- According to TrendEconomy, South Korea was the largest exporter of nitric acid worldwide in 2022 and accounted for nearly exports worth USD 144 million or 25% of the global exports. Moreover, China accounts for approximately 7% of the overall agricultural acreage globally, thus feeding 22% of the world’s population. The country is the largest producer of various crops, including rice, cotton, potatoes, and others. Hence, the demand for nitric acid, which is used in fertilizers, is rapidly increasing owing to the large-scale agricultural activities in the country.
- According to the Fertilizer Association of India, the production of total fertilizer stood at 42.59 million MT during 2021-22, representing a slight decline of 1.1% over 2020-21.
- According to OICA, China, Japan, India, and South Korea were among the top 5 largest producers of vehicles in the world. Therefore, the Asia-Pacific's automotive end-user industry accounts for the most significant demand for nitric acid compared to other regions worldwide.
- Nitric acid is a raw material for inks, pigments, and dyes, which have major applications in the textile industry. According to Fibre2Fashion, China exported textiles, apparel, and clothing accessories worth USD 323.344 billion in 2022, registering a growth of 2.53% compared to 2021.
- Nitric acid is used to produce explosives such as trinitrotoluene (TNT), nitrocellulose, nitroglycerin, and others, which are being used in mining applications. Also, in January 2024, the Ministry of Mines and the Government of India signed their first-ever lithium exploration and mining project agreement between Khanij Bidesh India Limited (KABIL) and the state-owned enterprise of Catamarca province of Argentina. Such initiatives can further augument the market of nitric acid in the country.
- Therefore, the factors mentioned above are expected to have a significant impact on the market in the coming years.
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