The deadline for the nitration process renovation has arrived. Is it the biggest impact on Shandong?

(Source: WELINK Chemical)

On March 12, 2024, the Ministry of Emergency Management issued the “Catalogue of Safety Production Process Technologies and Equipment for Eliminating Outdated Hazardous Chemicals (Second Batch),” requiring that during the period from March 12, 2024 to March 31, 2026, companies must use intermittent or semi-intermittent kettle nitration processes to produce the following products: H acid, 6-nitro body, nitrobenzene, dinitrobenzene, nitrotoluene, dinitrotoluene, nitrochlorobenzene, etofenprox, mesotrione, dimethylpentylin, methanesulfonylurea, fenbendazole, albendazole, nitroguanidine, etc., and must carry out technological retrofits and be forcibly converted to three categories of continuous processes.

The nitration process retrofit is the “red line” for high-risk process safety remediation that the national Ministry of Emergency Management enforces. Its core is to eliminate relatively outdated intermittent/semi-intermittent kettle nitration and forcibly switch to continuous and automated processes. Companies that fail to retrofit by the deadline will be ordered to stop production and have their qualifications revoked.

1. Why must nitration process retrofits be carried out?

Nitration reactions are high-risk chemical reactions. During production, the reaction heat is enormous, and loss of temperature control can easily lead to polymerization explosions and explosions. In the past, multiple serious accidents involving nitration reaction explosions have occurred.

On March 19, 2026, an explosion occurred in the nitration workshop of Inner Mongolia Liyuan Technology, resulting in 2 people missing and 3 people injured. The main reason was that intermittent kettle nitration led to heat runaway due to failure of the cooling system; combined factors such as equipment aging, failure of safety interlocks, and historical hazards not rectified ultimately caused the decomposition explosion of nitration products. This is also an important accident before the deadline for nitration unit retrofits.

Figure 1 Image of the explosion scene of Inner Mongolia Liyuan Technology

Image source: Ersanli Information

On May 27, 2025, an explosion occurred at Shandong Youdao Chemical’s continuous flow nitration unit. The main reasons were process defects, unqualified raw materials, and a chain conveyor blockage causing frictional heat buildup and explosion. As a result, 10 people died, 2 people were missing, and 19 people were injured. Continuous processes do not mean absolute safety; defects in operation can also lead to serious consequences.

On March 21, 2019, the “3·21” exceptionally major explosion at Jiangsu Xiangshui Tianjiayi was mainly caused by long-term illegal storage of nitration waste—dinitrobenzene-type compounds—leading to the disastrous outcomes of 78 deaths and 76 serious injuries. This is the deadliest chemical accident in terms of casualties since the founding of the People’s Republic, and it directly promoted nationwide nitration remediation and the March 31 retrofit deadline.

On August 31, 2015, Shandong Binyuan Chemical Co., Ltd. had an explosion in its mixed dinitrobenzene operation, resulting in 13 deaths and 25 injuries. The main cause was illegal discharge of nitration materials onto the ground; ignition triggered by landing impact led to fire, and exposure/roasting of equipment caused an explosion. This accident is a typical chain accident caused by illegal operation in kettle nitration that resulted in heat runaway.

On February 28, 2012, an explosion occurred in the nitroguanidine reactor of KER Chemical in Zhaoxian County, Hebei, resulting in 25 deaths, 4 missing persons, and 46 injuries. The main reason was heat runaway and an overtemperature/overpressure explosion in kettle nitration. This was the most major accident in the hazardous chemicals sector in that year.

On May 11, 2007, an explosion occurred in Hebei Cangzhou Dahuaxing’s toluene dinitration unit, resulting in 5 deaths and more than 80 injuries. The core reason was failure of the nitration static separator, leading to over-nitration heat runaway and a mixture explosion.

On February 20, 2006, a kettle nitration reaction unit explosion occurred at Tianjin Yikun Chemical, causing 10 deaths and multiple injuries. The core reason was that the addition of mixed acid was too fast, leading to heat runaway and a chain reaction explosion involving multiple kettles.

2. What process technology retrofits are going to be carried out for nitration?

The state has clearly defined mandatory requirements for nitration process retrofits and will forcibly promote continuous and automated new processes, while simultaneously implementing a complete set of safety supporting standards to thoroughly address safety hazards of traditional processes.

This retrofit clarifies three categories of mandatory replacement processes, among which the microchannel reactor is the preferred recommended process. Microchannel reactors, thanks to their advantages of small holdup volume, high heat-exchange efficiency, and strong reaction controllability, can minimize explosion risks from heat accumulation to the greatest extent. Next is the tubular continuous nitration process, which realizes continuous flow reaction of materials, avoids local overheating, and improves reaction stability. In addition, multi-stage series continuous kettle processes are also included within the scope of compliant replacements. Through multi-stage stepwise reactions, the risk pressure of each single kettle is reduced. All three process categories achieve intrinsic safety upgrades and eliminate the drawbacks of traditional kettle processes that have large heat accumulation and concentrated risks.

The process retrofit also synchronously supports multiple mandatory safety requirements. The entire process must be equipped with a DCS distributed control system and an SIS safety instrumented system to enable full-process automated control. In addition, hard-mandated configurations of three major safety support systems—ESD emergency shutdown, emergency cooling, and emergency venting—must be in place to respond to sudden abnormal operating conditions.

In addition, the entire process must implement online real-time monitoring of temperature, pressure, flow, and material composition, and realize data-linked early warnings. At the same time, strictly control on-site working personnel. For a single unit, the number of personnel on-site for guarding/operation must not exceed 2. Implement remote centralized control and unmanned operation mode to minimize personnel exposure risk. Starting from April 1, 2026, any related production lines that have not completed compliant retrofits will be ordered by law to stop production and be shut down, forcing the industry to complete a safety overhaul.

The retrofit contents and directions of relevant enterprises must pass acceptance by the relevant national safety authorities; otherwise, they will also face non-compliance risks.

3. How much cost will the nitration process retrofit bring to enterprises?

According to what I understand, if the nitration process retrofit is carried out in accordance with national regulations, the retrofit cost for a single unit will not be less than 10 million yuan; the mainstream cost will be between 20 million and 30 million yuan. Considering retrofit of the entire plant, including digitized and intelligent control of units, as well as renovation for three-waste treatment and other safety equipment, the total cost for the entire plant may not be less than 50 million yuan, with mainstream retrofit costs around 100 million yuan. Retrofit costs for some large-scale enterprises will exceed 200 million yuan.

As the deadline for nitration unit retrofits approaches, the supply volume of related products produced by nitration units will also be greatly affected. For products such as H acid, dispersed dye intermediates, nitrochlorobenzene, etc., their effective operating load will drop significantly. In the writer’s view, given that oil prices are currently staying high, policy may further push up the prices of related nitration products.

4. Does this “deadline” have the greatest impact on Shandong’s related industries?

The nitration process retrofit deadline has a relatively greater impact on Shandong’s related industries. Shandong is a major province for nitration units. Shandong’s nitration unit scale accounts for 35% and above of the national scale. Especially in fields such as pesticide intermediates, dispersed dyes, and nitration compounds, Shandong has many units, and many upstream and downstream enterprises are also distributed in the province. After this policy deadline, small- and mid-sized nitration units in Shandong may gradually shut down. Some companies will choose to exit the market. Large-scale enterprises will also complete the retrofit one after another, and the overall trend of market supply scale will show a decline.

Figure 2 Shandong nitration-related data—share of the nation

From March, the Shandong Provincial Emergency Management Department has launched the strictest-ever full-area supervision and inspection of nitration process enterprises. The core requirement is that any intermittent kettle elimination not completed before the March 31 deadline will be “no retrofit means stop.” The inspections will involve stopping production, rectification, top-of-the-line penalties, and no leniency. Shandong is enforcing “hardline” law enforcement, full coverage, and zero tolerance this time.

The key inspection areas are regions where nitration enterprises are concentrated, including Zibo, Weifang, Dongying, Yantai, and Linyi, covering both enterprises inspected in 2024 and enterprises identified during inspections as having safety hazards and failing to close out rectification in a closed loop.

After April 1, if enterprises still fail to rectify or their rectification is not completed, severe consequences will be taken against the enterprises, including permanent shutdown, revocation of nitration qualifications, and legal closure. The main responsible persons of the enterprises will be included in joint disciplinary actions for dishonesty and banned from the industry. If enterprises cause accident hazards or refuse to implement shutdown orders, the matter will be referred to judicial authorities and criminal liability will be pursued.

With the nitration equipment retrofit deadline reached, the industry is entering a mandatory supply-side reform. Large numbers of small and mid-sized capacities that cannot afford retrofit costs or cannot complete continuous and automated upgrades will directly exit the market, and market supply will contract significantly. It is expected that the supply-demand structure for related intermediates and downstream products will become tight, and there is a substantial possibility that prices will move upward. In addition, industry entry barriers will rise significantly; competition order will be optimized. Capacity and orders will quickly concentrate among leading companies that have completed compliant retrofits and have stronger financial and technological capabilities. Industry concentration will continue to increase, and the industry will move as a whole into a new pattern centered on safety and compliance.

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