The reason for the price increase of concentrated nitric acid in July was already quite sufficient: first, the traditional seasonal price increase rule determines that July is the peak sales season for concentrated nitric acid; second, the device expansion energy in 2006 has been basically released in the first half of 2007. In the July plan, no new devices have been put in place. Third, the basic production raw materials led by coal and the basic living raw materials led by pork have all increased significantly; Fourth, the cost of rising transportation costs has increased...
Perhaps precisely because of these observations, the nitric acid manufacturers who have been eager to stand up for a loss for two years have seized this "prime time" and are eager to expand production and increase production. In addition, the low temperature this summer provided optimum technological conditions for the high output of all enterprises. In a short period of one month, the domestic production of concentrated nitric acid soared to 182,600 tons, an increase of 134.82% from the previous period and an increase of 131.7% from the same period of last year. Set a record high.
However, no one can expect that the price of concentrated nitric acid during the gold sales season will go down in retrograde direction and will not rise again. Just entering the month of July, the market supply and demand situation began to deteriorate. The prices in the southern markets that were still rising a few days ago suddenly reversed their directions, and prices dropped rapidly. The hard-to-rise prices of tens of yuan from May to June all fell back in place in just half a month. Some enterprises in Shandong have even sold concentrated nitric acid below 1,250 yuan/ton, and fell below the total cost of 1300 to 1,400 yuan/ton.
The concentrated nitric acid market from the glory of 2005, to the repeated attacks since 2006, continue to suffer, in the end what is the reason? There are four sources of misfortune in the industry: repeated construction of equipment, concentrated delivery of production, different thinking among decision makers, and excessive competition in the competition.
Since China's gradual transition from a planned economy to a market economy, concentrated nitric acid products as a basic chemical raw material have been favored by more and more companies. In the late 1990s, small-scale concentrated nitric acid plants took the lead in Shandong's development. In 2000, 100,000 tons of nitric acid used equipment began to enter the country from the West. Enterprises have implemented upgrades and upgrades of existing installations, and the production area has also expanded to Anhui, Jiangsu, and Henan. From 2004 to 2005, the price of concentrated nitric acid hit a price of more than 2,000 yuan/ton, which lasted for a year. Profiteer suddenly caught the eye of investors. In addition, with the gradual domestication of concentrated nitric acid equipment and the continuous maturation of production technology in recent years, the threshold for entry into this production field has also been reduced. After a project has been funded and constructed, it can reach production and put into the market in two to three years. Construction of concentrated nitric acid projects has been carried out throughout the country. By 2006, these projects will all basically enter the production phase. The disaster of the concentrated nitric acid market will start here: resource prices will soar, product prices will plummet, and industry profits will plummet.
According to statistics, the growth rate of China's concentrated nitric acid plant capacity was 5% to 10% before 2000, and 18% to 20% in the past five years, and 31.25% in 2006. As the nitric acid industry in China lacks the macro-planned regulatory agencies, the project has been repeatedly constructed with no scale effect and intensive effect. The technology is not very advanced, the unit energy consumption is high, the unit production cost is also high, and the enterprises lack market competitiveness.
Historically, almost every sales catastrophe on the nitric acid market has been related to the fact that production has been concentrated on the market at the same time. In July 2007, the out-of-control of this centralized delivery was even more extreme. Entering June, with the rise in downstream demand for nitric acid and the gradual increase in prices, nitric acid companies with plant potential have started to increase their production capacity. As the newly added production time is too concentrated, the rising power of the market's peak season fails, and the price of concentrated nitric acid not only does not increase, but instead reverses.
The nitric acid self-rescue activities should be traced back to 7 years ago. In 2000, Anhui Huaihua Group, the largest concentrated nitric acid enterprise in the country, hosted an industry-wide nitric acid market seminar. In November 2006, 14 large enterprises faced with a crisis issued a self-help, self-help, and self-discipline initiative in Jinan. They opposed malicious competition and price fluctuations and jointly assumed industrial responsibility. After the initiative was launched, it quickly received a consistent response from concentrated nitric acid companies across the country, and the market price increased by more than 200 yuan/ton in just two weeks. In May 2007, all of the nitric acid companies in Qingdao were eager to initiate self-help activities again. However, due to the differences between the companies, the expected results were not achieved.
In fact, whether it is device construction, production control, or sales order, it depends on the thinking and strategy of the enterprise decision-makers. It is precisely because of the differences in the concept of the operation of the core characters of these enterprises and the different business concepts that have made the cohesion of the entire industry drop, and the order of production and sales has become increasingly chaotic.
Experts pointed out that there are two ways to save the current concentrated nitric acid industry. First, the financial balance between profit and loss is calculated to limit the production price; the second is to extend the industrial chain, develop nitric acid downstream fine chemical products, and develop high value-added products. The former is an effective method in front of us, while the latter is a long-term solution. In fact, no matter what the method is, it needs the unity of thought of the entire industry to act actively.
Perhaps precisely because of these observations, the nitric acid manufacturers who have been eager to stand up for a loss for two years have seized this "prime time" and are eager to expand production and increase production. In addition, the low temperature this summer provided optimum technological conditions for the high output of all enterprises. In a short period of one month, the domestic production of concentrated nitric acid soared to 182,600 tons, an increase of 134.82% from the previous period and an increase of 131.7% from the same period of last year. Set a record high.
However, no one can expect that the price of concentrated nitric acid during the gold sales season will go down in retrograde direction and will not rise again. Just entering the month of July, the market supply and demand situation began to deteriorate. The prices in the southern markets that were still rising a few days ago suddenly reversed their directions, and prices dropped rapidly. The hard-to-rise prices of tens of yuan from May to June all fell back in place in just half a month. Some enterprises in Shandong have even sold concentrated nitric acid below 1,250 yuan/ton, and fell below the total cost of 1300 to 1,400 yuan/ton.
The concentrated nitric acid market from the glory of 2005, to the repeated attacks since 2006, continue to suffer, in the end what is the reason? There are four sources of misfortune in the industry: repeated construction of equipment, concentrated delivery of production, different thinking among decision makers, and excessive competition in the competition.
Since China's gradual transition from a planned economy to a market economy, concentrated nitric acid products as a basic chemical raw material have been favored by more and more companies. In the late 1990s, small-scale concentrated nitric acid plants took the lead in Shandong's development. In 2000, 100,000 tons of nitric acid used equipment began to enter the country from the West. Enterprises have implemented upgrades and upgrades of existing installations, and the production area has also expanded to Anhui, Jiangsu, and Henan. From 2004 to 2005, the price of concentrated nitric acid hit a price of more than 2,000 yuan/ton, which lasted for a year. Profiteer suddenly caught the eye of investors. In addition, with the gradual domestication of concentrated nitric acid equipment and the continuous maturation of production technology in recent years, the threshold for entry into this production field has also been reduced. After a project has been funded and constructed, it can reach production and put into the market in two to three years. Construction of concentrated nitric acid projects has been carried out throughout the country. By 2006, these projects will all basically enter the production phase. The disaster of the concentrated nitric acid market will start here: resource prices will soar, product prices will plummet, and industry profits will plummet.
According to statistics, the growth rate of China's concentrated nitric acid plant capacity was 5% to 10% before 2000, and 18% to 20% in the past five years, and 31.25% in 2006. As the nitric acid industry in China lacks the macro-planned regulatory agencies, the project has been repeatedly constructed with no scale effect and intensive effect. The technology is not very advanced, the unit energy consumption is high, the unit production cost is also high, and the enterprises lack market competitiveness.
Historically, almost every sales catastrophe on the nitric acid market has been related to the fact that production has been concentrated on the market at the same time. In July 2007, the out-of-control of this centralized delivery was even more extreme. Entering June, with the rise in downstream demand for nitric acid and the gradual increase in prices, nitric acid companies with plant potential have started to increase their production capacity. As the newly added production time is too concentrated, the rising power of the market's peak season fails, and the price of concentrated nitric acid not only does not increase, but instead reverses.
The nitric acid self-rescue activities should be traced back to 7 years ago. In 2000, Anhui Huaihua Group, the largest concentrated nitric acid enterprise in the country, hosted an industry-wide nitric acid market seminar. In November 2006, 14 large enterprises faced with a crisis issued a self-help, self-help, and self-discipline initiative in Jinan. They opposed malicious competition and price fluctuations and jointly assumed industrial responsibility. After the initiative was launched, it quickly received a consistent response from concentrated nitric acid companies across the country, and the market price increased by more than 200 yuan/ton in just two weeks. In May 2007, all of the nitric acid companies in Qingdao were eager to initiate self-help activities again. However, due to the differences between the companies, the expected results were not achieved.
In fact, whether it is device construction, production control, or sales order, it depends on the thinking and strategy of the enterprise decision-makers. It is precisely because of the differences in the concept of the operation of the core characters of these enterprises and the different business concepts that have made the cohesion of the entire industry drop, and the order of production and sales has become increasingly chaotic.
Experts pointed out that there are two ways to save the current concentrated nitric acid industry. First, the financial balance between profit and loss is calculated to limit the production price; the second is to extend the industrial chain, develop nitric acid downstream fine chemical products, and develop high value-added products. The former is an effective method in front of us, while the latter is a long-term solution. In fact, no matter what the method is, it needs the unity of thought of the entire industry to act actively.
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