Ammonium Nitrate Market Size, Share & Trends Analysis Report By Product Type: (High density, Low density, Others), By Application: (Explosives, Fertilizer, Others), By End Use Industry: (Mining, Construction, Agriculture, Military Explosives, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2032

Market Overview

The global ammonium nitrate market size was valued at USD 17.1 Billion in 2023. It is projected to reach USD 24.12 Billion by 2032, growing with a CAGR of 3.9% during the forecast period (2024-2032). To feed the growing population, agriculture must continue. Growth in ammonium nitrate fertilizer is expected. 

Ammonium nitrate is a chemical compound that remains solid at standard pressure and room temperature. It is primarily used as a nitrogen fertilizer. The ammonium nitrate market is expected to grow in tandem with the fertilizer industry, which is dependent upon the agriculture industry. Additionally, ammonium nitrate registers high demand in explosive manufacturing as an oxidizing agent, which is projected to further foster market growth in the future. Since ammonium nitrate is a highly flammable material, there are several precautions and instructions listed on the safety data sheets that are issued by the producers and by various governments. Even though pure ammonium nitrate is not combustible, it is a powerful oxidant that promotes the burning of various organic and inorganic materials. Ammonium nitrate is stable at room temperature and pressure, but since a powerful initiation charge could cause it to explode, it is prohibited to store it next to explosives or blasting chemicals.

The ammonium nitrate market has been witnessing considerable growth and is expected to retain this growth momentum during the forecast period, owing to growing construction activities, increasing consumption of explosives, and a growing defense sector. Additionally, population growth alongside the increasing demand for quality food produced in limited arable land is compelling farmers to increase crop yield, which in turn has been accelerating the demand for fertilizers and, subsequently, ammonium nitrate.

Market Dynamics

Market Drivers

Increasing Agricultural Activities

Between 2009 and 2050, the population of the globe is projected to increase by more than a third, or 2.3 billion people. Agricultural activities will need to keep up to feed the expanding population. The use of ammonium nitrate as fertilizer is anticipated to rise. Although ammonium nitrate is commonly available for use as fertilizer, its use is prohibited in several nations, like the United States and India, to those who do not have a valid license. The limitation was put in place primarily to prevent the chemical from being used to make bombs, which is anticipated to hurt the market.

Usage in Mining

Development in mining activities leads to greater use of explosives, which is predicted to drive up demand for ammonium nitrate over the predicted period. Ammonium nitrate by itself is not explosive. It is, nevertheless, one of the components used in the creation of explosives. According to the UN classification for dangerous goods, it is categorized as an oxidizer (5.1). It needs other components, such as fuel, etc., in order to become explosive. Such explosive compositions need detonators or other initiators to ignite. The primary ingredient of slurry explosives used in mining is ammonium nitrate. However, fertilizer is frequently the source of ammonium nitrate utilized in improvised explosive compositions. Ammonium nitrate used for fertilizer is available as prills or as powder. An increase in mining activities is expected to propel the market for ammonium nitrate.

Market Restraint

Government Regulations

Strict government restriction has resulted from worries about this fertilizer being used illegally to make explosives in various parts of the world. Some fertilizer merchants have stopped handling this material due to restrictions on sales and transportation. Fatal explosions are likely due to the extensive use of ammonium nitrate. Equally alarming is the chemical's major contribution to harmful climate change and environmental deterioration.

Regional Analysis

Europe is expected to hold the largest share in the ammonium nitrate market during the forecast period, owing to the region’s strong consumer base for various end-use industries, coupled with strong investments towards revitalizing its construction sector. Additionally, European countries, including Russia, France, and Germany, have emerged as major contributors to the region’s market, further strengthening the region’s foothold. Germany dominates the European market. Moreover, the widespread utilization of ammonium nitrate in explosive and fertilizer applications has also contributed to market growth. Although it is estimated that less land will be utilized for crops, permanent grassland, and oilseeds in the area, more land will likely be used for fodder, cereals, and protein crops in the following years. Due to the increased demand for industrial use, regional cereal consumption is expected to increase quickly. Wheat and maize growing areas are anticipated to increase quickly in the foreseeable future, which will, in turn, increase the demand for fertilizers.

Asia Pacific is expected to witness the fastest growth during the forecast period, owing to the expansion of various end-use industries, such as the mining industry, agriculture, and construction in the region. The demand for ammonium nitrate is expected to gain traction in various countries such as China, India, Japan, and South Korea on account of the growing consumer base along with the favorable regulatory scenario. Additionally, increasing construction activities and the availability of affordable labor and land are other factors expected to drive the region’s market growth. Due to increased expenditures aimed at modernizing agriculture infrastructure like warehousing, irrigation systems, and storage, India's agricultural sector will experience significant growth. Additionally, government programs and initiatives to educate farmers about the usage of fertilizers will increase the demand for fertilizers in the area.

North American ammonium nitrate market, owing to the growing demand from the quarry, mining, and construction sectors. Additionally, the presence of developed countries such as the U.S. and Canada is a key driver for the region’s market growth on account of the strong demand from defense sectors in these countries. Due to the rising demand for explosives used in defense as well as the rising need for ammonium nitrate fuel oil, there is a huge demand for ammonium nitrate. Although Canada's fertilizer business has recently seen expansion, the United States still serves as the region's main agricultural market. There are many suppliers of nitrogen, phosphate, potash, and sulfur fertilizers in Canada. The export market for the nation is likewise very large. Due to the booming expansion of agricultural operations in the area throughout the course of the forecast period, the fertilizers segment is expected to expand.

The Latin America and Middle East & Africa region is expected to witness steady growth, owing to the increasing demand for ammonium nitrate-based fertilizers from the region’s agriculture sector. Countries such as Oman, Saudi Arabia, Qatar, and the UAE in the region are projected to witness strong demand on account of the accelerated demand from the mining sector. Growing populations have fueled the demand for agricultural production, particularly in Latin American developing nations. Ammonium nitrate, a key ingredient in fertilizers, is more in demand as agricultural production rises. The broadening mining sector in the region and the adaptability of ammonium nitrate-based explosives are driving the expansion of the region's overall ammonium nitrate market.

Segmental Analysis

The global ammonium nitrate market can be segmented by application and end user.

By Application

The explosive segment witnessed high growth in the ammonium nitrate market owing to rising mining and querying activities which has led to a rise in the demand for civil explosives. According to the Queensland government, around 99% of ammonium nitrate is used as an explosive for mining operations. Additionally, Ammonium nitrate is also used in military applications as an explosive in combination with nitro compounds. The growing use of ammonium nitrate in the mining industry and military applications as an explosive is expected to contribute to market growth during the forecast period.

Fertilizers containing ammonium nitrate are far more effective than other fertilizers and emit fewer greenhouse gases. Quick-release nitrogen, which is instantly available to plants, makes up half of the nitrogen in fertilizers containing ammonium nitrate. The other half is slow-release nitrogen to create a nutritious balance for plants.

By End User

The agriculture segment is expected to hold a prominent share of the global ammonium nitrate market during the forecast period, as agriculture is a major user of ammonium nitrate in the form of fertilizers, which are used to add essential nutrients such as nitrogen, potassium, calcium, and others to the soil to maximize crop yield. The growing use of fertilizers in agriculture, owing to decreasing soil fertility, increasing food demand, and uncertain climate change, is expected to upsurge the demand for fertilizers and, in turn, augment market growth in years to come.

Impact of covid-19

The pandemic had caused a lockdown in almost all the countries across the world backed up by strict government regulations such as social distancing and quarantine. A severe effect of the lockdown was observed on the economy of various countries which further canceled certain construction projects temporarily or permanently.

Further, immediate long-term effects were seen in the supply chain and the deployment of smart solutions required in the smart buildings. However, the ease offered and the multiple benefits of the smart building solutions are anticipated to increase the deployments during the time.

Recent Developments

• December 2021- Smartchem Technologies, a fully-owned subsidiary of Deepak Fertilisers & Petrochemicals Corporation, laid the foundation for its Rs 2,200-crore technical ammonium nitrate (TAN) complex at the Gopalpur industrial park. The project at the Tata Steel industrial park in Gopalpur will have an annual capacity of 377 kilotonnes and is scheduled for commissioning by August 2024.
• January 2021- Using air, water, and renewable electricity, chemical engineers at UNSW Sydney have discovered a method to generate "green" ammonia without the need for the high temperatures, high pressures, and massive infrastructure currently required to produce this crucial component.