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China’s nitric acid industry moves forward steadily / Author/Source: Sinochem News Network / Date: 2020-09-29 / Clicks: 34 At the 2020 Nitric Acid Industry Meeting and the meeting related to calcium and magnesium nitrate fertilizers, held in Chengdu on September 27, Gu Zongqin, president of the China Nitrogen Fertilizer Industry Association, said that 2020 was a truly extraordinary year for the nitric acid industry. On the one hand, the sudden outbreak of COVID-19 has had a significant impact on production in this industry; on the other hand, the explosion at the port of Beirut, Lebanon, has severely affected the safe production practices in China’s nitric acid industry. The two occurred one after another, exacerbating the situation in China’s nitric acid industry. Originally, in the second half of 2019, the industry’s prosperity had just begun to recover, but in 2020 it faced unprecedented difficulties. image001.jpg Gu Zongqin said that since 2019, in the face of slowing economic growth and increasing pressures related to safety and environmental protection, the entire industry has actively pursued technological innovation, strived to adjust its product portfolio, and made efforts to tap into demand from downstream markets, thus enabling the industry to move forward steadily. In 2019 and the first half of 2020, the economic performance of China’s nitric acid and nitrate industries remained generally stable. image002.jpg The industrial structure continues to be optimized. First, efforts to reduce overcapacity are being carried out on an ongoing basis. According to statistics from the China Nitrogen Fertilizer Industry Association, in 2019, 900,000 tons of nitric acid production capacity and 700,000 tons of ammonium nitrate production capacity were phased out. By the end of 2019, there were 86 nitric acid manufacturers in China, with a production capacity of 18.9 million tons, a decrease of 3.8% compared to the previous year; there were 33 ammonium nitrate manufacturers, with a production capacity of 10.48 million tons, a decrease of 3.7% as well. Secondly, new production capacities continue to be established. Nitric acid production plants using the medium-pressure and single-pressure methods have advantages such as low investment costs and low production expenses, making them suitable for small- to medium-scale nitric acid production. These plants have seen rapid development in recent years; the current production capacity is 410,000 tons, with another 550,000 tons in construction or planned for future development. With the optimization of the production capacity structure, in China’s nitric acid industry, outdated production methods such as the atmospheric pressure method, high-pressure method, and combined method account for 1.7% of total capacity, while the double-pressure method accounts for 96.1% of capacity; the medium-pressure method and single-pressure method together account for 2.2% of capacity. In the nitrate industry, the atmospheric pressure neutralization method accounts for only 5.0% of capacity, whereas the pressure-neutralization method accounts for 95%. According to incomplete statistics, China’s production of concentrated sulfuric acid in 2019 was 2.442 million tons, a decrease of 7.9% compared to the previous year. In 2019, there were 27 companies that produced concentrated nitric acid, 3 fewer than in the previous year. In 2019, China’s production of *ao acid an was 6.263 million tons, representing a 4.5% increase on a year-on-year basis; this figure reached the highest level in recent years (6.25 million tons in 2014). Although the overall production capacity of the industry declined, production volume increased and the operating rate rose. In 2019, the operating rate was 59.8%, up 4.7% compared to the previous year. However, due to limitations in storage capacity and weak demand from downstream industries, the operating rate remained at a low level. The scale of facilities is becoming more rational. Gu Zongqin pointed out that with the application of domestic technologies, the scale of facilities in the nitric acid and *ao acid an industries is becoming more reasonable. Following the commissioning of the first 360,000 tons per year nitric acid plant at Wanhua Chemical, the second plant was also successfully tested in Chongqing Huafeng in May this year. To meet the demands of small and medium-sized enterprises for downstream nitrate and nitric acid-based fertilizers, single-pressure units with a capacity of 50,000 to 150,000 tons per year have been rapidly adopted. The two 150,000-ton units owned by Shanxi Dongjin began trial operation in August this year. By the end of 2019, there were 31 nitric acid production units with a capacity of 270,000 tons per year or more, accounting for 45.2% of the total capacity; 48 units with a capacity of 150,000–270,000 tons per year, accounting for 38.1%; and 34 units with a capacity of less than 150,000 tons per year, accounting for 16.7%. The capacity for producing 500,000 tons per year or more accounts for 25.8%, while the capacity ranging from 200,000 to 500,000 tons per year accounts for 65.8%; the capacity below 200,000 tons per year accounts for 8.4%. image003.jpg Significant achievements in product structure adjustment Gu Zongqin noted that over the past two years, the industry has made positive progress in adjusting its product structure, with particularly notable results in the adjustment of industrial *ao acid an products. To meet the requirements of new explosives production processes and improved safety controls, enterprises increased the production of porous *ao acid an and liquid *ao acid an. In 2019, the output of porous *ao acid an reached 1.439 million tons, a 45% increase on a year-on-year basis, accounting for 29.3% of total industrial *ao acid an production; the output of liquid *ao acid an was 1.728 million tons, representing a 57% increase year-on-year and accounting for 35.3% of total production. The output of crystalline *ao acid an was 1.735 million tons, a 35.4% decrease on a year-on-year basis, with its share dropping to 35%. Furthermore, in order to address the capacity limitations of *ao acid an fertilizers and to meet the demand for nitrate nitrogen in the agricultural sector, companies are actively developing various nitrate-based compound fertilizers such as ternary nitro compound fertilizers, *ao acid an calcium, calcium nitrate, magnesium nitrate, and phosphate nitrate fertilizers. In 2019, the production of ternary nitro compound fertilizers was 2.995 million tons (produced using in-house ammonium nitrate plants), representing a 4.7% increase on a year-on-year basis; the production of calcium ammonium nitrate was 2.1 million tons, with a 5% increase compared to the previous year. Technological innovation efforts continue to advance. Gu Zongqin noted that the nitric acid and *ao acid an industry is constantly strengthening its technological innovation capabilities, with a range of advanced technologies and equipment being introduced and put into use. The main ones include: the retrofit technology for traditional double-pressure nitric acid production plants, energy-saving retrofit technologies for ammonia oxidation furnaces, the conversion of nitric acid production units from steam-driven to electric drive systems, the technology for producing 150,000 tons per year of dilute nitric acid using the single-pressure method, 360,000 tons per year nitric acid production units of the four-in-one type, medium-pressure nitric acid production units of the three-in-one type, membrane separation treatment technologies for *ao acid an wastewater, granulation technologies for *ao acid an and *ao acid an calcium using circulating fluidized beds, and dust removal technologies for the exhaust gases generated during *ao acid an calcium granulation. In addition, the industry has also developed a range of new product production technologies, including those for phosphatic nitrates, various large-grain nitro products, chlorinated potassium phosphate nitrate, sulfur-based nitrate fertilizers, electronic-grade potassium nitrate, and disodium production technologies. image004.jpg Market prices have declined slightly. Since the beginning of this year, due to the impact of the pandemic, there has been a shortage in demand at the downstream level; meanwhile, inventory levels of *ao acid an have risen. Coupled with the introduction of new production capacity, these factors have led to a drop in the price of *ao acid an. In the first half of the year, the average ex-factory price of porous *ao acid an was 1,760 yuan per ton, a decrease of 8.0% compared to the previous period; the average ex-factory price of industrial *ao acid an was 1,745 yuan per ton, a decrease of 8.3% on a year-on-year basis. The fundamental reason for the price drop remains an overall surplus in supply, with companies facing significant inventory pressures; in some cases, inventory levels even exceed 10,000 tons. In August, special safety inspections were carried out regarding *ao acid; many companies halted production for rectifications, which had a certain impact on market prices, yet these prices remained below those of the same period last year. According to statistics from the China Nitrogen Fertilizer Industry Association, from January to July this year, China’s production of industrial ammonium nitrate was 2.528 million tons, a 2.2% decrease compared to the previous year. Of this amount, 658,000 tons were in the form of porous ammonium nitrate, representing a 4.0% decline; 595,000 tons were in liquid form, with a 13.1% increase; 1.275 million tons were in crystalline form, showing a 7.1% decline. Enterprises produced 1.054 million tons of nitro-compounded fertilizers (including industrial phosphorus-based fertilizers), an increase of 12.6% compared to the previous year. In the first half of this year, 63,000 tons of *ao acid an were exported, representing a year-on-year increase of 23.2%. The export volume of mixtures of *ao acid an and calcium carbonate (modified *ao acid an for agricultural use) was 2,200 tons, with a year-on-year increase of 88.5%. Sodium nitrate exports amounted to 15,000 tons, showing a year-on-year decline of 6.3%. The export volume of calcium nitrate *ao acid an and their mixtures (calcium *ao acid an for agricultural use) was 286,000 tons, representing a year-on-year increase of 19.2%. Safety controls are being continuously strengthened. Gu Zongqin emphasized that as a raw material for **, *ao acid an is under strict supervision by the relevant authorities in terms of sales, purchase, storage, and transportation. In June this year, the Ministry of Emergency Management, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the Ministry of Transport jointly issued the \"Catalogue of Hazardous Chemicals Subject to Special Control,\" classifying phosgene acid as an explosive chemical. Strict control is required for hazardous chemicals listed in the catalog, including establishing systems for tracking information, standardizing packaging management, enforcing strict requirements for safe production, strengthening transportation controls, and implementing organized storage practices. On August 4 of this year, an explosion involving *ao acid occurred at the port of Beirut, the capital of Lebanon. The central leadership attached great importance to this incident; the Safety Committee Office of the State Council dispatched 6 working groups to conduct two rounds of comprehensive inspections and rectification efforts in the *ao acid production facilities as well as in the ports that handle explosive hazardous materials. This inspection had a significant impact on the *ao acid/an industry. Numerous issues were identified; for instance, the vast majority of enterprises had excessive inventory levels, insufficient safety distances between warehouses and storage tanks, and warehouse designs that failed to meet explosion-proof requirements. The working group issued requirements for rectification to the local authorities, assigned priority attention to major safety hazards, and urged enterprises to carry out repairs within a set time limit; work was not allowed to resume until those hazards were resolved, and several enterprises were ordered to suspend operations. The extent and scale of this safety inspection fully demonstrate **the attitude and determination towards safety improvements. According to officials from the Ministry of Emergency Management, **promoting the identification of risks associated with hazardous chemicals such as *ao acid an will be regarded as an important measure to prevent major safety hazards. It can be said that the *ao acid an industry is facing an unprecedentedly severe challenge.