Nitric Acid Prices Slump in US and Europe Amidst Lackluster Downstream Demand

Nitric Acid prices continue to slump throughout June 2023 across Europe and North America. This price decline is attributed to several factors, including declining feedstock Ammonia and Nitric Oxide prices and lackluster demand from the end-user fertilizer segment. The continuous downward trend of Ammonia and fluctuating price of upstream Natural Gas has severely affected the production of Ammonia and its derivatives, including Nitric Acid. Growing inflationary pressure worldwide and global economic slowdown have also impacted the prevailing price trend.

During June 2023, Nitric Acid prices experienced their lowest point in the USA market in the wake of declining demand from the fertilizer industry. Additionally, declining demand for Nitric Acid from the domestic market and fewer imports to other countries due to low water levels in the Mississippi River have led to surplus material availability in the market. Further, the global economic slowdown and growing inflation have made consumers hesitant to purchase bulk.

The United States Purchasing Managers Index, as indicated by Federal Reserve Economic Data, fell from 48.4 in May 2023 to 46.3 in June. This drop is a major indicator of the drop in demand for goods. Further, the Natural Gas Index of the country fell by 2.6% in June. This is the fourth continuous decline in this Index.

Similarly, the prices of Nitric Acid have been grappling in the European market for a prolonged period. The ongoing war in the region and growing inflation have severely impacted the economic conditions in the region. In an effort to curb inflation, European Central Bank has raised interest rates high in the region. This has weakened buying enthusiasm from the end-user market.

Further, surplus material of Nitric Acid coupled with depreciating demand from the fertilizer industry has also put downward pressure on the prices. Traders were forced to keep prices low due to a lack of procurement orders.

In summary, the Nitric Acid market has remained bearish throughout June in North American and European regions due to various factors.

However, a potential shift in the market of Nitric Acid is expected in both the European and North American regions in the coming months as consumers may make purchases for the post-harvesting season. Further, economic rebound is also expected, which may lead to revived demand from the downstream sector. Additionally, the increased price of feedstock Ammonia and fluctuating price of upstream Crude Oil and Natural gas may affect production activity and consequently impact the prices of Nitric Acid in the forthcoming months.