On the one hand, a large increase in resources is a serious shortage of demand this year.
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The main reason for the price before the Spring Festival was earlier was: after the accident of Jilin Shuangben, the responsibility for production safety was raised to a high political level. The downstream of nitric acid – aniline production was cautious, and some large aniline devices had to be shut down or overhauled, resulting in suspension of production. The decrease in the demand for nitric acid, coupled with other accidents in the downstream of nitric acid, such as dyes, has also occurred from time to time, further exacerbating the dim demand in the nitric acid market; due to the long Spring Festival holiday, many enterprises downstream of nitric acid have stopped production or reduced production, and the demand for nitric acid has sharply decreased. And this winter, when the weather is cold, this provides favorable conditions for the production of nitric acid suitable for low temperature operation. Each nitric acid enterprise increases production, and the output greatly increases. During the Spring Festival, the situation of railroad transportation of nitric acid is more severe than in previous years. The Ministry of Railways strictly limits coal and food. Transportation of materials other than fertilizers made it difficult to ship nitric acid.
After the fifteenth day of the first month, it is said that China's traditional Spring Festival is completely over. With the loosening of bottlenecks during the Spring Festival season, the pressure on nitric acid rail transportation has been eased, and the downstream devices for nitric acid are also being driven or ready to drive. The aniline devices that have been under-employed due to safety inspection problems and the Zhejiang dyeing devices that have been discontinued due to major accidents have been driven. To resume production. However, these good signs have not effectively relieved the nitric acid market sales pressure. After the Spring Festival holiday, many users of nitric acid downstream still refused to accept the goods, causing the nitric acid market to still not see the spring of market recovery. There are four reasons for this situation: First, social stocks are too high. Due to the sluggish sales of nitric acid before the Spring Festival, the company’s inventory is high and it is difficult to digest in a short time. It is understood that inventory of many companies is difficult to digest in 1 to 2 months. The second is that the demand is still insufficient. Most post-holiday downstream TDI enterprises have not fully resumed production. The reporter learned from Anhui Huaihua Group, Jinan Chemical Fertilizer Plant, and Qingdao Hengyuan Chemical Company that the downstream users of these enterprises are generally not returning to normal production, resulting in product sales. Difficulties, product inventory pressures worse than before the holiday. Third, the resources of nitric acid are still increasing. The newly added 100,000 tons/year nitric acid plant in Jinan Chemical Fertilizer Plant has already entered the purge stage and will soon drive; the Jilin Chemical Company's nitric acid plant has already driven, but since the plant's aniline plant has not yet been put into production, the concentrated nitric acid produced will also enter the commodity market. . Fourth, the mentality of the current sales staff of nitric acid production companies is panic. Due to the 500,000 tons of new nitric acid production entering the market in the second half of 2006, nitric acid production companies have relatively tight psychological sales. They all want to seize the market ahead of schedule, resulting in Hebei and Shandong provinces igniting the price war in advance.
In view of the new situation facing the domestic nitric acid market, experts expect that the nitric acid market price war that would have been fully opened in the second half of the year is likely to come earlier.