Market Trends of Concentrated Nitric Acid Industry
Ammonium Nitrate to Dominate the Market
- Ammonium nitrate is the dominant segment owing to the extensive utilization of agricultural fertilizers, explosives, and aviation fuels.
- Ammonium nitrate is a fertilizer and can be used as an intermediate for making other fertilizers containing high amounts of nitrates, such as calcium and urea ammonium nitrate.
- The rise in demand for fertilizers to cater to the ever-increasing requirement for food is fueling the ammonium nitrate segment, which, in turn, is propelling the concentrated nitric acid market.
- Ammonium nitrate is also used as an intermediate for explosives and agrochemicals. The explosives industry shares a noteworthy interest in items in the mining of coal and metals. Production of explosives uses ammonium nitrate, which requires a lot of nitric corrosive as an antecedent, which legitimately impacts the interest in nitric corrosive.
- According to the Mineral Commodity Summaries 2024 by USGS, in 2023, US mineral production bolstered the economy by over USD 105 billion, marking a USD 4 billion uptick from the previous year. Industries reliant on nonfuel mineral materials, spanning steel, aerospace, and electronics, generated approximately USD 3.84 trillion in value-added products, showcasing a 6% rise from 2022's USD 3.62 trillion.
- According to USGS, in 2023, US mines yielded around 1,000 tons of silver, valued at roughly USD 760 million. This output came from four dedicated silver mines and 31 other operations that produced silver as a byproduct. Globally, silver mine production in 2023 rose marginally to an estimated 26,000 tons. This uptick was primarily driven by heightened production in Mexico and Chile, where new silver mines either commenced operations or scaled up.
- According to USGS, in 2023, iron ore production and trade saw a notable uptick, largely attributed to restocking and heightened demand for intermediate products. Specifically, the United States witnessed a surge in domestic iron ore production, reaching an estimated 44 million tons, marking a 13% rise from the 39 million tons recorded in 2022.
- Ammonium nitrate is utilized in ammonium nitrate fuel oil (ANFO), which is widely used as bulk industrial explosives. Increasing demand for ANFO for manufacturing civil explosives is projected to drive the ammonium nitrate application segment during the forecast period.
- Therefore, the aforementioned factors are expected to significantly impact the market in the coming years.
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Asia-Pacific to Dominate the Market
- Asia-Pacific stands as the largest and fastest-growing market for concentrated nitric acid. Asia-Pacific is the industrial base with established manufacturing facilities of agrochemicals, fertilizers, explosives, polyurethane foams, etc.
- According to the Indian Brand Equity Foundation (IBEF), in 2023, the market’s size reached INR 94,210 crore (equivalent to USD 11.32 billion), propelled by rising agricultural demands and strategic government interventions. By the end of FY24, fertilizer production hit 45.2 million tonnes, underscoring the efficacy of implemented policies.
- According to Fertilizers India, in 2023, production and sales of major fertilizers, including urea, DAP, and NPKs, recorded significant growth. Specifically, urea, DAP, and NPK production increased by 12%, 11%, and 4%, respectively, compared to the previous year.
- Various industrial applications, such as automotive, building and construction, and agrochemicals, are the prominent factors likely to boost the market in Asia-Pacific.
- Adipic acid is formulated by oxidation of the mixture of cyclohexanone and cyclohexanol with nitric acid, also known as ketone-alcohol oil (KA oil).
- In small amounts, adipic acid is used in food ingredients in the form of flavoring agents and can also be used in the production of nylons and polymers. An increase in the use of nylon and polyurethane is estimated to drive the demand for adipic acid. This, in turn, is likely to propel the concentrated nitric acid market during the forecast period.
- In the automotive industry, the trend of replacing metal parts with lightweight and strong materials, such as synthetic rubbers, nylon, and elastomers, drives the demand for nitrobenzene and adipic acid. Rising demand for synthetic rubbers, elastomers, and polyurethane foams in the automotive industry is anticipated to drive market demand.
- Adipic acid is also used in the coatings used for the automotive exterior. The increasing use of flexible PU foams in automotive interiors and cushions drives the demand for TDI. These factors are estimated to fuel the demand for concentrated nitric acid during the forecast period.
- Asia-Pacific is the first largest manufacturer of automobiles globally. In this region, according to the OICA, automotive production in 2023 accounted for 55,115,837 units, an increase of 10.18% compared to the production in 2022, which was reported to be 50,021,217 units.
- According to the International Organization of Motor Vehicle Manufacturers (OICA), total automotive production in India reached 5,851,507 units in 2023, a nearly 7% increase from the previous year.
- Rising vehicle production is coupled with growing automotive sales in the country. More than 4.1 million cars, sedans, and utility vehicles were sold in the domestic market in 2023, an 8.2% increase from the 3.79 million vehicles sold in 2022, according to the Society of Indian Automobile Manufacturers (SIAM). Demand for utility vehicles, which comprised 57.4% of total sales, powered growth.
- Strong application in the chemicals industry, owing to its usage in the manufacturing of various polymers, including polyurethane and polyamides, is anticipated to drive the concentrated nitric acid market.
- Therefore, the aforementioned factors are expected to show a significant impact on the market in the coming years.
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