Chemical Profile

11 February 2002 00:00  [Source: ICB Americas]

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NITRIC ACID   February 11, 2002

US PRODUCER	CAPACITY*
Agrium US, Beatrice, Neb.	145
Air Products, Pace, Fla.	200
Air Products, Pasadena, Tex.	110
Angus Chemical, Sterlington, La.	65
Apache Nitrogen Products, Benson, Ariz.	140
Arco Chemical, Lake Charles, La.	155
CF Industries, Donaldsonville, La.	680
Coastal Chem, Battle Mountain, Nev.	250
Coastal Chem, St. Helens, Ore.	20
DuPont, Beaumont, Tex.	95
DuPont, Orange, Tex.	170
DuPont, Victoria, Tex.	300
Dyno Nobel, Donora, Pa.	115
Dyno Nobel, Louisiana, Mo.	270
El Dorado Nitrogen, El Dorado, Ark.	425
El Dorado Nitrogen, Baytown, Tex.	445
Farmland Industries, Beatrice, Neb.	55
Farmland Industries, Dodge City, Kan.	70
Farmland Industries, Enid, Okla.	40
Farmland Industries, Fort Dodge, Iowa	165
Farmland Industries, Lawrence, Kan.	220
First Chemical, Pascagoula, Miss.	75
Hercules, Parlin, N.J.	80
LSB Industries, Cherokee, Ala.	270
LSB Industries, Crystal City, Mo.	180
LaRoche Industries, Orem, Utah	80
LaRoche Industries, Seneca, Ill.	160
Mississippi Chemical, Yazoo City, Miss.	955
Mobay, Baytown, Tex.	45
Mobay, New Martinsville, W. Va.	90
Nitram, Tampa, Fla.	220
Nitrochem, Newell, Pa.	75
Orica, Joplin, Mo.	160
PCS Nitrogen Fertilizer, Augusta, Ga.	475
PCS Nitrogen Fertilizer, Geismar, La.	825
PCS Nitrogen Fertilizer, Lima, Ohio	105
PCS Nitrogen Fertilizer, Wilmington, N.C.	160
Royster-Clark, Cincinnati, Ohio	85
Royster-Clark, East Dubuque, Ill.	110
J.R. Simplot, Helm, Calif.	80
J.R. Simplot, Pocatello, Idaho	20
Solutia, Pensacola, Fla.	365
Terra International, Port Neal, Iowa	255
Terra International, Verdigris, Okla.	630
Terra International, Woodward, Okla.	90
TradeMark Nitrogen, Tampa, Fla.	35
Unocal, Kennewick, Wash.	285
Unocal, West Sacramento, Calif.	70
Vicksburg Chemical, Vicksburg, Miss.	75
Total	10,190

*Thousands of metric tons per year, 100 percent HNO3 basis. Nitric acid is usually produced by the stepwise catalytic (platinum) oxidation of ammonia through nitric oxide to nitrogen dioxide, which is then absorbed in and reacted with water. Nitric acid is sold commercially in various concentrations, expressed as degrees Baume (Be), an arbitrary specific gravity scale. Roughly 90 percent of nitric acid production is consumed captively on site, primarily in the production of ammonium nitrate fertilizers and some industrial explosives. Thus, the merchant market for nitric acid accounts for only about 10 percent of the total. Vicksburg Chemical is a subsidiary of Cedar Chemical Corp. El Dorado Nitrogen is a subsidiary of LSB Industries. Nitrochem acquired the Newell, Pa., nitric acid facility of Welland Chemicals in 2000. Nitrochem is owned by Daftna Holding Ltd., Brinc Inc., Baldev Ltd. and MG Partners. In September 2000, PCS Nitrogen Fertilizer permanently closed its Clinton, Iowa, and La Platte, Neb., plants, eliminating 115,000 tons and 150,000 tons, respectively. In November 2000, LSB Industries, through wholly owned subsidiaries, completed the acquisition of LaRoche IndustriesÕ nitric acid assets located in Crystal City, Mo. and Cherokee, Ala. LaRoche is a subsidiary of Orica USA. This is the first publication of this profile.

DEMAND
1999: 9.688 million metric tons; 2000: 9.853 million metric tons; 2004: 10.052 million metric tons.
Imports and exports are negligible, amounting to about 25,000 tons imported and 15,000 tons exported, annually.

GROWTH
Historical (1995-2000): 1.6 percent per year; Future: 0.5 percent per year through 2004.

PRICE
Historical (1995-2000): High, $225 per short ton, 42 cents (67.2 percent), tanks, c.l., tanks, works, 100 percent basis; low, $190, same basis. Current: $210, same basis. Current: 45 cents to 50 cents, same basis.

USES
Ammonium nitrate, 75 percent; adipic acid, 9 percent; nitrobenzene, 4 percent; toluene diisocyanate (TDI), 4 percent; metal treatment, 3 percent; metal nitrates, 1 percent; miscellaneous, 4 percent.

STRENGTH
Nitrobenzene is produced by the direct nitration of benzene with nitric/sulfuric acid mixtures, and most of this goes into the production of aniline as an intermediate consumed in 4,4-methylenebis (phenylisocyanate) (MDI) and "polymeric" MDI production. MDI is expected to continue growing at better than the GDP rate and will consequently add to nitric acid's growth. TDI is produced from dinitrotoluene, which in turn is produced by the nitration of toluene with nitric/sulfuric acid mixtures. The primary use of TDI is in the manufacture of flexible polyurethane foams, which account for about 85 percent of total domestic TDI consumption. Likewise, TDI growth is expected to do slightly better than GDP growth, and this too will be reflected in a modest growth for nitric acid.

WEAKNESS
Demand for nitric acid is largely dependent upon demand for solid ammonium nitrate fertilizer and nitrogen fertilizer solutions that incorporate ammonium nitrate. Ammonium nitrate accounts for three-quarters of nitric acid's demand, and is projected to grow at less than 0.5 percent in coming years. Consumption of nitric acid in adipic acid manufacture is expected to increase only marginally during the forecast period, again at less than 0.5 percent annually.

OUTLOOK
Nitric acid is a mature product and heavily dependent on the demand for fertilizers. Near-term, ammonium nitrate is expected to show only minimal growth and nitric acid demand will reflect this situation. Longer-term, organic chemical applications will become increasingly more important in the demand picture for nitric acid. Nitric acid growth through 2004 is projected to be 0.5 percent annually.

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