Chemical profile: nitric acid

2008/05/15

DEMAND 2006: 8m tonnes 2007: 8.9m tonnes 2011: 10.1m tonnes, projected. Demand equals production plus imports (2006: 30,000 tonnes 2007: 38,000 tonnes) less exports (2006: 27,000 tonnes 2007: 19,000 tonnes). Sources: US Census Bureau USITC

GROWTH Historical (2002-2007): 6.5%/year. Future: 3%/year through 2011. Source: ICIS Chemical Business

PRICE Historical (2002-2007): High, $290/short ton, 42º Baume (67%), bulk, free on board (FOB) low, $145, same basis. Current: $260-265 ton, same basis. Source: USITC

USES Ammonium nitrate (AN), 76% adipic acid (ADA), 9% toluene di-isocyanate (TDI), 6% nitrobenzene, 6% metal nitrates, 1% miscellaneous, including metal treatment, 2%. Source: ICIS Chemical Business

MARKET PERSPECTIVE

AN production represents the largest market for nitric acid, accounting for 76% of total US demand in 2007. About 85% of AN is used as fertilizer or in the production of fertilizer solutions such as urea ammonium nitrate (UAN), with most of the balance being consumed in various types of explosives.

US farmers have been aggressively buying fertilizer to cash in on the current buoyant grain prices, especially for corn and wheat. The ethanol industry has created a change in the agricultural sector's normal 75m-80m acres (30m-32m ha) planted with corn each year, being increased to 90m acres. The high corn price and extra corn planting have also lifted wheat by 60% from a year ago.

With increased fertilizer application, production of UAN was up by 14% in 2007 over the proceeding year, going from 7,068 short tons (6,411 tonnes) to 8,061 short tons. Consequently, demand for nitric acid was up by 12% in the same period.

ADA demands about 9% of nitric acid, and is highly dependent on consumption of nylon 6,6. This resin's growth has slowed recently because its principal use is for carpet fiber, which is sensitive to economic conditions.

TDI consumes about 6% of the nitric acid, and is mainly employed in the manufacture of flexible polyurethane foams, used in applications for transportation, furniture and carpet underlay. These sectors are also economy-sensitive and are underperforming.

OUTLOOK

Nitric acid is a mature product and heavily dependent on fertilizer consumption. But the current and projected future demands for grain and grain products, and thus nitrogen fertilizer products, will pull nitric acid's demand above its historical growth rate. Growth over the forecast period is forecast to be 3%/year.


US NITRIC ACID CAPACITY,TONNES/YEAR*

Company Location Capacity
Agrium Beatrice, Nebraska Cincinnati, Ohio Kennewick, Washington West Sacramento, California 585
Air Products Pasadena, Texas 110
ANGUS Chemical Sterlington, Louisiana 65
Apache Nitrogen Products Benson, Arizona 140
BayerMaterialScience Baytown, Texas 45
CF Industries Donaldsonville, Louisiana 750
Cherokee Nitrogen Cherokee, Alabama 210
Coffeyville Resources Coffeyville, Kansas 240
DuPont Beaumont, Texas 95
Dyno Nobel Battle Mountain, Nevada Cheyenne, Wyoming Donora, Pennsylvania Louisiana, Missouri St. Helens, Oregon 755
El Dorado Chemical El Dorado, Arkansas 430
El Dorado Nitrogen Baytown, Texas 400
First Chemical Pascagoula, Mississippi 75
Geneva Nitrogen Geneva, Utah 80
Hercules Parlin, New Jersey 80
INVISTA Orange, TexasVictoria, Texas 470
Koch Nitrogen Beatrice, Nebraska Dodge City, Kansas Enid, Oklahoma and Fort Dodge, Iowa 330
LyondellBasell Lake Charles, Louisiana 170
Nitrochem Newell, Pennsylvania 180
Orica USA Joplin, Missouri Seneca, Illinois 320
PCS Nitrogen Augusta, Ga. Geismar, Louisiana Lima, Ohio 1,405
Rentech Energy Midwest East Dubuque, Illinois 110
Rubicon Geismar, Louisiana 110
J.R. Simplot Helm, California Pocatello, Idaho 100
Solutia Cantonment, Florida 365
Terra Industries Port Neal, Iowa Verdigris, Oklahoma Woodward, Oklahoma Yazoo City, Mississippi 1,900
TradeMark Nitrogen Tampa, Florida 35
TOTAL 9,555

SOURCE: ICIS CHEMICAL BUSINESS

* Thousands of tonnes/year, 100% 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 specific gravity. Approximately 90% of nitric acid production is consumed captively on site, primarily in the production of ammonium nitrate (AN) fertilizers and some industrial explosives. Thus, the merchant market for nitric acid accounts for only about 10% of the total.

In 2007, Germany's Bayer MaterialScience closed its toluene di-isocyanate facility in New Martinsville, West Virginia, taking down 90,000 tonnes/year of nitric acid capacity.

In 2006, the fertilizer company Agrium acquired Royster-Clark and its two nitric acid plants in Cincinnati, Ohio, and East Dubuque, Illinois. The combined capacity is 195,000 tonnes/year. A month later Agrium sold the Illinois facility with its 110,000 tonne/year capacity to US-based Rentech.

At the end of 2005, US-based Air Products closed its converted products fertilizer operations at Pace, Florida, which included 200,000 tonnes/year of nitric acid capacity.

ANGUS Chemical is a subsidiary of chemical giant Dow. El Dorado Chemical, El Dorado Nitrogen, and Cherokee Nitrogen are subsidiaries of LSB Industries, of Oklahoma. First Chemical is a subsidiary of chemical major DuPont. PCS Nitrogen is a subsidiary of Canada's Potash Corporation of Saskatchewan. Rubicon is a joint venture that manages production assets owned by the US firms Huntsman and Chemtura.


Profile last published March 14, 2005

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