The global nitric acid market is expected to witness substantial growth over the forecast period owing to its widespread use in chemicals and fertilizers. Growing demand for ammonium nitrate fertilizers for agricultural applications is expected to be a key driver for nitric acid market growth. Rising need for high crop yield to meet increasing population demands for food has triggered the use of synthetic fertilizers over the past few years which are anticipated to have a positive impact on the nitric acid market. Growth in the chemical processing industry, particularly in emerging economies including China and India, is further expected to propel nitric acid demand over the next seven years. However, stringent environmental regulations regarding the use of ammonium nitrate fertilizers in Europe and North America are expected to restrain market growth. Ammonium nitrate fertilizers are known to contaminate ground water through leaching and nitrification which has led to the introduction and implementation of directives by EPA limiting the use of nitrate-based fertilizers. Ammonium nitrate fertilizer is expected to be the largest application segment over the next six years due to increasing demand in agriculture coupled with the lack of regulations regarding use of nitrate-based fertilizers in China and India.
Global nitric acid market volume, by application 2012 - 2022 (kilo tons)
Asia Pacific was the largest market for nitric acid in 2013 on account of the strong presence of chemical and fertilizer industries in the region. Stringent regulations in Europe and North America pertaining to the use of synthetic fertilizers have resulted in a shift of demand to emerging economies of China and India. Central & South American countries, including Mexico and Brazil, are also expected to have strong growth prospects in light of increasing number of chemical companies.
Fertilizers such as ammonium nitrate account for over 80% of the total nitric acid consumption. The ammonium nitrate produced is primarily used as a fertilizer in the agriculture industry. Further, some percent of the ammonium nitrate in engaged in the production of alloy fertilizer blends including urea ammonium nitrate. High demand for ammonium nitrate as a fertilizer in the past few years has been a major driver for the nitric acid market growth. However, increasing incidences of groundwater contamination as a result of excessive fertilizer use is expected to restrict growth prospects over the forecast period. Adipic acid is again a major application of nitric acid, increasing demand of which is expected to augment market growth prospects over the forecast period. Adipic acid is majorly employed in the manufacture of nylon 6,6 resins and fibers.
Other applications of adipic acid include polyester polyols production for polyurethane resins. Nylon 6,6 is a polymer composite which finds extensive application in the automotive industry as a replacement for interior and exterior metal parts. Nitrobenzene is a precursor to aniline and its derivatives. Key applications for aniline include manufacturing of polyurethane foams, aramid fiber, and pharmaceuticals. The increasing use of the above-mentioned products in industries including automobile and construction is expected to propel nitrobenzene market growth over the forecast period. TDI is majorly used in the manufacture of flexible polyurethane foams along with rigid urethane forms and polyurethane products like adhesives, sealants, coatings, and elastomers. This, in turn, is likely to boost nitric acid market over the projected period.
North America was a major market for nitric acid owing to a large number of manufacturers in the U.S. the market is expected to further witness growth owing to the emergence of end-use industries including automobile, construction, furniture and agriculture. The increasing use of ammonium nitrate as explosive in the mining industry is expected to provide growth prospects for the nitric acid market over the forecast period. Asia Pacific is likely to be the fastest growing market for nitric acid over the next seven years.
Growing end-use industries in the region including furniture, construction, automobile, and chemical are expected to be a key factor influencing nitric acid market growth over the forecast period. In addition, shifting automotive manufacturing bases from countries in Europe to Asia Pacific including India and China is expected to propel market growth. The majority of the countries in Asia Pacific are agriculture-based economies and hence have a high demand for ammonium nitrate fertilizers which is expected to fuel nitric acid market growth.
Key market participants include DuPont, LyondellBasell, PCS Nitrogen, Terra Industries, Agrium, AkzoNobel NV, Apache Nitrogen Products, Basic Chemical Solutions LLC and PVS Chemicals. In December 2012, BASF gave a new contract to M+W Group for the construction of a new nitric acid production plant. The contract includes planning, procurement, turnkey construction and commissioning of the entire plant which would commence production at the end of 2014.
In November 2014, Dow Chemical Company sold its subsidiary (Angus) to Golden Gate Capital for USD 1.215 billion. This led Dow to exit the nitric acid market after 2014. In November 2014, Agrium Inc expanded its nitrogen facility in Texas. This expansion project helped in increasing the annual ammonia capacity for the facility required for the production of nitrogen and its derivatives thereby improving its nitrogen footprint in the agricultural industry.
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