MARKET ANALYSIS

Nitric acid is one of the world’s largest commodity chemicals and a corrosive mineral acid
which is also known as spirit of niter or aqua fortis. Nitric acid in pure form is colorless and it is a
strong oxidizing agent. It becomes pale yellow due to decomposition of oxides and gives off
choking red or yellow fumes in moist air. Nitric acid forms a good conductor of electricity
because it ionizes readily in solution and it is also miscible with water in all proportions.
Commercially, sold nitric acid has concentration of around 70% and more than 85%
concentration is known as fuming nitric acid. Nitric acid is further categorized as white fuming
and red fuming depending upon the concentrations nitrogen oxide and the color of the solution.
This highly corrosive intermediate chemical is used in the production of nitrate based nylon
presursors, fertilizers and other chemicals. There are a few of nitric acid based compounds which
are unstable and are commonly charged in explosive while the stable compounds are used in the
production of making plastics, manufacturing of paints and dyes. The table below shows the U.S
nitric acid market size, by application, 2012-2022 (USD Billion).

Table 1 U.S nitric acid market size, by application, 2012-2022 (USD Billion).
 Ammonia is the key raw material used in the manufacturing of nitric acid and its
production is concentrated mainly in the China, U.S, India and Russia due to the availability of
large natural gas reserves in the countries. Ammonia is used in the manufacturing of nitric acid
which is then further engaged in the production of The largest chemical end uses for nitric
acid including adipic acid, nitrochlorobenzene, toluene di-isocyanate and ammonium nitrate.
Manufacturers of nitric acid is highly in demand due to it is largely dependent on the demand for
end products for which it serves as an input. World nitric acid consumption has exhibited an
increasing trend since 2009, with average annual growth of 2.0% during 2000 to 2016.
Ammonium Nitrate (AN) and Calcium Ammonium Nitrate (CAN) are the largest production of
nitric acid, conquering almost 77% of the total world consumption of nitric acid in 2016. Nitric
acid is used predominantly as an intermediate for fertilizer production which is about 80% of
nitric acid was used for fertilizer products in 2016, whereas the remaining 20% was used in
industrial applications.

However, there are some issue arises which brings a major end use for AN fertilizer due to
concerns about nitrate groundwater contamination and security issues. This is due to nitrification
and leaching which causes in the loss of nitrogen to underground water. Therefore, there is a way
by focusing towards limiting the level of nitrogen in groundwater to less than 50 milligrams per
liter which is introduced and implemented by EPA and the European Union. Plus, solid urea
replaced the AN fertilizer, which is less costly, less dangerous and also has a higher nitrogen
content (46%) than AN (34%). Adipic acid uses nitric acid during manufacturing process which is
then used in manufacturing of nylon 6,6. Nylon 6,6 is a polymer composite, which finds extensive
application in textiles, automotive and tire among others. Toluene di-isocyanate is also one of the
applications which use nitric acid during manufacturing process. It is used in manufacturing of
polyurethane foams which is used in various industries such as automotive, carpet, furniture
industry and transpiration. Nitrochlorobenzene is an intermediate for the production of chemicals
such as 2,4-dinitrochlorobenzene and 3,4-dichloronitrobenzene in which the growing government
are benefiting the growth of the chemical industry by supporting industrialization along with
surging consumption of chemicals in industries especially in emerging economies of Asia Pacific.
The pie chart below shows world consumption of nitric acid.
 Table 2 World consumption of nitric acid

Europe and China were accounted for over 60% of the global consumption as they are
the prime consumers on of nitric acid in 2014. This is due to the presence of large agricultural
and industrial market in Asia Pacific which is expected to be a key factor responsible for the
great growth of the global nitric acid market.