Ammonia Market

Market Overview

The global ammonia market size was valued at USD 72.3 billion in 2021. It is expected to reach USD 126.57 billion by 2030, growing at a CAGR of 6.42% during the forecast period (2022–2030).

Ammonia is a colorless gas with a distinct odor that is used as a fundamental chemical in the production of many items that people use daily. It is naturally present in the environment through the air, soil, and water, as well as in plants, animals, and people. Additionally, ammonia is a critical component of ammonium nitrate fertilizer, which releases nitrogen, an essential nutrient for growing plants, including lawns and crops. Most ammonia produced worldwide is used in fertilizer to maintain food production. Food crops typically deplete the nutrient content of the soil. Farmers typically use ammonia-based fertilizers to maintain healthy crops and productive soil. The global ammonia market is anticipated to expand during the forecast period due to the rising demand for food production and the growing reliance on fertilizers.

Market Dynamics

Global Ammonia Market Drivers

Growing Use in the Agriculture Sector

Ammonia is a critical ingredient in many everyday products. It is present in the soil, air, water, plants, animals, and people. Ammonium nitrate fertilizer, which releases nitrogen, uses ammonia as a building block—also used to make urea, ammonium nitrate, and aqua ammonia. The fertilizer industry's growing need for ammonia throughout the years could boost this sector of the economy during the forecast period. Even while the medium-term outlook for global agriculture has not changed much since the epidemic, agricultural production growth rates have slowly decreased. There will be upward pressure on fertilizer demand in both established and a growing number of emerging nations due to expectations to enhance fertilizer usage efficiency and recycle additional organic nutrient sources.

Growing Use in the Production of Explosives

Ammonia is one of the essential commodity chemicals that is produced in enormous quantities all over the world. Since nitric acid is the primary ammonia derivative used in producing explosives like nitroglycerine, nitrocellulose explosives, and ammonium nitrate slurry explosives, ammonia is oxidized during the process of making nitric acid. Ammonium nitrate is an explosive salt created by mixing ammonia and nitric acid: the more effective the ammonium nitrate content, or NH4-NO3, the greater the explosive potential. Additionally, several businesses around the world are growing their explosives manufacturing facilities. This is anticipated to fuel the ammonia demand during the forecast period.

Global Ammonia Market Restraints

Risks of Danger in Concentrated Form

Concentrated ammonia has corrosive and hazardous properties. For servicing the polarographic oxygen sensor OroboPOS, concentrated ammonia solution (25%–30% ammonium hydroxide solution) is frequently used. The ammonia concentration may decrease during storage after opening the commercial solution, making the ammonia stock useless for sensor service. The nose, throat, and respiratory tract immediately burn when exposed to high ammonia levels in the air, resulting in airway damage, bronchial and alveolar edema, and respiratory distress or failure. Lower inhaled concentrations can irritate the nose, throat, and coughing reflexes. Such ammonia health risks hamper the demand for the market under study during the forecast period.

Global Ammonia Market Opportunities

Growing Use in Various Industries

It is anticipated that the demand for ammonia will increase over the forecast period due to its potential use as a refrigerant, as a possible water purifier, and as a component in the production of a wide range of goods, including plastics, explosives, fabrics, pesticides, and dyes. Since ammonia can absorb significant heat from its surroundings, it is used as refrigerant gas and in air-conditioning equipment. It is also utilized in industrial applications as a low-GWP refrigerant. Anhydrous ammonia of the refrigerant grade is an unimpaired, clear, colorless liquid or gas. It is ammonia that is at least 99.95% pure.

The uses of ammonia are expanding thanks to technological advancements. Plants that produce ammonia are known for their safety features. One of the main reasons to anticipate a sustained increase in the use of ammonia as a long-term refrigerant is that the engineering and servicing requirements to deal with its high toxicity and low flammability are well established. Several businesses and organizations have recently begun promoting ammonia refrigeration, which has been dormant for many years. As a result, ammonia is anticipated to be used more frequently in the nation as a natural refrigerant, increasing demand for the substance over the forecast period.

Regional Analysis

By region, the global ammonia market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global ammonia market and is expected to grow at a CAGR of 2.07% during the forecast period. China has the largest economy in the Asia-Pacific region regarding GDP, and about 7% of the world's total agricultural land is in China, which feeds 22% of the world's population. It produces more crops than any other nation, including rice, cotton, potatoes, etc. As a result of the extensive agricultural activities taking place in the nation, the demand for ammonia, which is used as fertilizer, is rapidly rising. The country's agricultural sector is anticipated to expand for several reasons, including China's urban consumers' desire to consume more freshly produced and processed fruits, vegetables, juices, etc., and the possibility that demand for freshly produced food items will increase as more people move from rural to urban areas. Since ammonia is used to process both natural and synthetic rubber, China is one of the world's largest natural rubber producers, producing about 800,000 tons of material annually.

Europe is expected to grow at a CAGR of 1.85% during the forecast period. The German economy is the fourth-largest and the biggest in Europe. In Germany, agriculture occupies about half of the country's land and is the world's third-largest exporter of agricultural products. On about one-third of Germany's agricultural land, grain is primarily grown; wheat is the main crop, followed by barley and rye. The largest pharmaceutical sector in Europe is in this nation. The international market is called the "World's Pharmacy." It has a significant position in the pharmaceutical market thanks to the active participation of numerous international pharmaceutical companies. There is a greater demand for ammonia because of the vast number of pharmaceutical companies and ongoing research to develop new drugs.

One of the world's biggest and most potent economies is that of the United States. The United States addresses agricultural and food policy through several initiatives, including conservation, nutrition assistance, and commodity support subsidies. These elements are what propel the nation's agriculture industry. During the forecast period, the ammonia market is anticipated to be driven by the rising demand for high-performance fertilizers and mineral nutrients to increase productivity. After China and India, the United States ranks third in the world market for textiles. The growing demand for technical textiles from various end-user industries, including automotive and industrial applications, has contributed to the country's textile industry's overall positive trend. Due to the expansion of the global economy, the demand for technical textiles is also anticipated to remain high in the upcoming years.

The past few years have seen slow economic growth in Brazil. Brazil has abundant agricultural resources, making agriculture a significant industry there. Over the past 20 years, the nation's agricultural output has increased significantly due to rising global demand, high prices, and technological advancements. Brazil has historically been one of the nations with the best agricultural sectors on which to base its economy. In Brazil, agriculture occupies about 41% of the country's total land area. Its total land area is 2.1 billion acres, and 867.4 million are used for agriculture in Brazil. Around 12,000 years ago, the Brazilians began farming, growing various crops, including sweet potatoes, maize, peanuts, and tobacco. Brazil is the world's top producer of sugarcane, turning out more than 600 million tons annually.

The export of oil is essential to the Saudi economy. Furthermore, the country's government exerts tight control over all the main economic activities. The manufacturing sector's emerging industries include Saudi Arabia's textile sector, which is anticipated to grow rapidly during the forecast period. In addition, most textiles purchased domestically are still imported from nations like the United States, even though Saudi Arabia's textile industry has expanded significantly. The local manufacturers now have a great deal of opportunity as a result. Furthermore, the nation's textile industry is anticipating a bright future thanks to government investments and policies.

Segmental Analysis

The global ammonia market is segmented by type and end-user industry.

Based on type, the global market is bifurcated into liquid and gas.

The liquid segment owns the highest market share and is expected to grow at a CAGR of 2.16% during the forecast period. Ammonia can be easily liquefied with dry ice (solid CO2) and transported in a thermos flask because it has a reasonable liquid range. Ammonia has a higher boiling point than its heavier congeners, a sign that solid hydrogen bonds are present and high heat of vaporization. As a result, despite low boiling points, ammonia is easily usable as a liquid at room temperature. There are numerous industrial and chemical uses for liquid ammonia. A suitable solvent for organic molecules is liquid ammonia (e.g., esters, amines, benzene, and alcohol). Moderate demand growth for liquid ammonia is anticipated overall over the forecast period.

Ammonia is a colorless, vital gas naturally made of nitrogen and hydrogen. Ammonia in gas form is primarily used in the refrigeration industry. Many industrial facilities, including processed meat, poultry, and fish, use anhydrous ammonia as a refrigerant. Due to the rising demand for refrigeration and cold storage facilities, more ammonia is being used as a refrigerant. In addition, the demand for ammonia as an alternative refrigerant gas is fueled by the expanding environmental regulations on other conventional refrigerants like CFCs and CFHCs. Overall, it is anticipated that these variables will favor the demand for ammonia gas during the forecast period.

Based on the end-user industry, the global market is bifurcated into agriculture, textiles, mining, pharmaceutical, and refrigeration.

The agriculture segment is the highest contributor to the market and is expected to grow at a CAGR of 2.27% during the forecast period. One of the most popular and effective sources of nitrogen for plant growth is ammonia, also known as NH3. Ammonia is now used more frequently as a fertilizer because it is relatively simple to apply and readily available. Ammonium nitrate fertilizer, which releases nitrogen, an essential nutrient for growing plants, including farm crops and lawns, uses ammonia as a fundamental building block. It can also be transformed into several common N fertilizers. With an estimated 80% market share, the agricultural sector rules the ammonia market globally. Since ammonia is primarily used in fertilizers, its use in the agriculture market will continue to grow over the forecast period.

Ammonia is employed in the pharmaceutical industry to create synthetic medications like sulfadiazine, sulfathiazole, sulfapyridine, and other sulfa drugs, as well as antibiotics, vitamins, antimalarials, methionine, and other amino acids, dentifrices, lotions, and cosmetics. Along with numerous other uses in pharmaceutical manufacturing and as a neutralizing agent, ammonia produces APIs and medications that prevent certain types of bacteria from growing and multiplying. Brazil, Denmark, Germany, and Russia are among the countries with the fastest-growing pharmaceutical industries. Many western players are looking to developing nations like China and Brazil for their pharmaceutical products to keep costs down as the pharmaceutical industry's costs continue to rise. This pattern is anticipated to raise the demand for ammonia from developing nations' pharmaceutical industries.

Recent Developments

• October 2022- BASF and Hannong Chemicals planned to form a joint venture for the commercial manufacture of non-ionic surfactants in the Asia-Pacific area.
• April 2022- Casale announced the successful acquisition of Green Granulation. This business possesses a proprietary technology and is a market leader in the design and construction of urea and Ammonium Nitrate (AN)/Calcium Ammonium Nitrate (CAN) granulation systems.