Ammonia Market is Estimated to Witness High Growth Owing to Advances in Nitrogen Capture Technologies
Ammonia is a colorless gas with a pungent smell. It is highly soluble and dissociates readily in water to form alkaline solutions. Ammonia has a wide range of applications ranging from fertilizers to refrigerants to pharmaceuticals to fibers and plastics. It is predominantly used in production of nitrogen fertilizers such as urea, ammonium nitrate and ammonium phosphate which are applied to crops globally to boost agricultural yields. The rising global demand for food due to growing population has been driving the need for ammonia-based fertilizers.
The Global ammonia market is estimated to be valued at US$ 82.74 Billion in 2024 and is expected to exhibit a CAGR of 6.5% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the ammonia market are Yara International ASA, BASF SE, CF Industries Holdings, Inc., Nutrien Ltd., Potash Corporation of Saskatchewan Inc., Dangyang Huaqiang Chemical Co., Ltd., Shanxi Jinfeng Coal Chemical Co Ltd., GTS Chemical Holdings plc.,Togliattiazot, OCI Nitrogen B.V., Agrium Inc., Sabic, and Koch Fertilizer, LLC among others.
The key opportunities in the ammonia market include rising applications in industrial chemicals and growing demand for ammonia as a refrigerant. Technological advancements in nitrogen capture from air using renewable energy sources can provide sustainable production routes for ammonia.
Market drivers
The major driver for the ammonia market is its widespread use in production of nitrogen fertilizers. According to estimations, over 80% of the ammonia produced globally is consumed by the agricultural industry for fertilizers. Growing global population and rising food demand are increasing the consumption of fertilizers which is driving the need for ammonia. Other factors such as advancements in nitrogen capture technologies using renewable energy are expected to boost the ammonia market during the forecast period.
Current challenges in the Ammonia market:
The ammonia market is facing challenges owing to rising input costs and environmental regulations. Strict environmental norms regarding carbon emissions from fertilizer plants are compelling companies to adopt green technologies and invest in carbon capture, which is increasing capital expenditure. Price volatility of natural gas, a key raw material for ammonia production, poses uncertainties. Most globally traded ammonia is produced using natural gas, so fluctuations in gas prices impact production costs. Additionally, demand from end-use industries like agriculture is dependent on weather conditions and crop prices, introducing uncertainties in the market.
SWOT Analysis
Strength: Ammonia has wide applications as fertilizer and in various industrial processes. Established production and distribution infrastructure exists.
Weakness: Production is input intensive and vulnerabilities related to energy and raw material prices. Environmental regulations raise compliance costs.
Opportunity: Boost in agricultural production and industrialization in developing nations will augment demand. Developing green ammonia can avail decarbonization opportunities.
Threats: stringent emission norms may force closures of inefficient plants. Substitute products can eat into market share.
Geographically, Asia Pacific dominates the ammonia market in terms of value, with China and India having sizable domestic production and consumption. Fertilizer demand from the agricultural sector, which is a major economic driver, supports the regional market. North America is another major regional market, while Middle East Africa is projected to be the fastest growing market owing to capacity additions by Gulf nations.
In terms of growth, the Asia Pacific region, especially China and India, is likely to witness the fastest gains in the ammonia market during the forecast period. This can be attributed to rising fertilizer consumption against the backdrop of increasing crop cultivation and expanding industrial activity in the major Asian economies.
