The Global Ammonia Market will grow at highest pace owing to rising agricultural sector

The global ammonia market is primarily driven by the growing demand from the agricultural sector. Ammonia is widely used as a nitrogen fertilizer to enhance crop yield and quality. It provides crops with essential nitrogen nutrients and improves overall soil fertility. The chemical composition of ammonia makes it highly soluble and readily absorbable by plants. Additionally, it is inexpensive and widely available across major farming regions. With the rising world population and shrinking arable land, agricultural production needs to be intensified to meet global food demand. This is expected to fuel consumption of nitrogen fertilizers including ammonia over the coming years.

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 major players are investing in increasing their production capacities and capacities to meet the growing demand from end-use industries globally.

The demand for ammonia from the agricultural sector is increasing at a fast pace. According to estimates, nitrogen fertilizer consumption is projected to rise by over 40% by 2050 to feed the increasing global population. This will significantly drive the adoption of ammonia as a major nitrogen source.

Technological advancements are enabling greater efficiency and sustainability in ammonia production. Players are focusing on developing carbon capture and storage technologies to produce clean ammonia using renewable energy sources like wind and solar. This will help reduce carbon footprint and transition towards a greener fertilizer market over the long run.

Market Trends

Shift towards clean hydrogen production - Major players are investing in electrolysis technologies to produce hydrogen from water using renewable energy sources. The hydrogen can then be used to synthesize carbon-free ammonia via the haber-bosch process.

Rising need for nitrogen fertilizer in emerging nations - Countries like India and Brazil are witnessing substantial growth in farmland and crop production. This will magnify the demand for nitrogen fertilizers like ammonia from these developing agricultural markets.

Market Opportunities

Use of ammonia as marine fuel - The international maritime organization's decarbonization targets are boosting research into using ammonia as an alternative zero-carbon marine fuel. Its widespread adoption can open new revenue streams.

Production of nitrogen-based chemicals - Ammonia serves as raw material for critical industrial chemicals like ammonium nitrate, nitric acid, urea etc. The increasing demand for these end-products will augment ammonia consumption over the long run.

COVID-19 Impact on Ammonia Market Growth
The COVID-19 pandemic negatively impacted the ammonia market growth in the initial months of 2020. Nationwide lockdowns enforced by various governments halted industrial and construction activities where ammonia is used. This led to a decline in ammonia demand from major end-use industries such as agriculture, textiles, pharmaceuticals, chemical processing and fertilizers. The supply chain disruptions caused by travel restrictions also affected ammonia production and distribution worldwide during this period.

However, as lockdowns started easing from mid-2020, the demand for ammonia gradually recovered. The agriculture sector witnessed high demand for nitrogenous fertilizers containing ammonia to meet food requirements of the growing population. Also, government stimulus packages aimed at boosting the industrial sector contributed to ammonia consumption. While construction activities are still below pre-COVID levels, they have improved compared to 2020. Manufacturers have undertaken initiatives like strategic pricing, new product development and partnerships to cater to changing market needs amid the ongoing uncertainties. Going forward, widespread vaccination programs and resurgence of global economy are expected to further aid the ammonia market expansion from 2022 onwards.

Geographical Regions with High Ammonia Market Value
Asia Pacific dominates the global ammonia market in terms of value, accounting for over 35% share. China, India, Indonesia, Pakistan, Thailand and Vietnam are major ammonia consuming nations in this region. Abundant availability of natural gas, a key ammonia production raw material, and a huge fertilizer manufacturing base have made Asia Pacific an attractive market. North America and Europe are other lucrative regions, mainly due to large agriculture and chemical industries demanding ammonia. Governments in Brazil, Argentina and Central American countries are promoting fertilizer usage to boost farm output, boosting Latin America’s ammonia consumption.

Fastest Growing Regional Market for Ammonia
The Middle East and Africa region is poised to witness the fastest growth in the ammonia market during the forecast period. This is because several countries in the MEA such as Saudi Arabia, UAE, Iran and Algeria have been investing heavily in expanding their petrochemical sectors where ammonia serves as an important feedstock and process chemical. The low manufacturing costs achieved due to cheap natural gas feedstock availability provides local producers a competitive edge in the global ammonia trade. Rising agricultural mechanization and farmer awareness about intensive farming techniques are also driving the fertilizer and ammonia demand from the African continent.