New York, Jan. 16, 2024 (GLOBE NEWSWIRE) -- In 2023, The ammonia market was valued at USD 220.93 billion in 2023 with significant growth and is projected to reach USD 472.5 billion by 2033 with an outstanding CAGR of 8.11%.
The ammonia market is undergoing robust growth, compelled by amplified demand for fertilizers in agriculture and water treatment. Ammonia, a multipurpose natural gas, serves as a base element for numerous commercial and household products, including fertilizers, cleaning supplies, stabilizers, neutralizers, and refrigerants. Its extensive applications extend to plastics, fabrics, explosives, and pharmaceuticals, with over 90% of global manufacturing dedicated to fertilizers, supporting sustainable food production worldwide.
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Main developments in the sector comprise CBH Group's introduction of a new Kwinana fertilizer facility, augmenting support for Western Australian grain farmers. Meanwhile, the United States Department of Agriculture's initiative aims to invest USD 3 billion in domestic fertilizer manufacturing capacity, with an initial allocation of USD 29 million for near-term projects.
Ammonia's significance extends from household cleaning to industrial water purification, catering to various sectors like rubber, food and beverage, and pharmaceuticals. The Russia-Ukraine war has significantly impacted the agricultural industry, foremost with a heave in fertilizer prices, considering Russia's main role as a major fertilizer exporter, underwriting 23% of global ammonia exports.
Collaborative efforts in ammonia manufacturing aim to decrease export dependence, nurturing a cleaner and more sustainable production process. The ammonia market is set to grow, driven by its vital role in fertilizers as well as industrial manufacturing, which promises to continue expansion in the next few years.
Key Takeaways
- Liquid ammonia rules the product type market segment due to its extensive use in various industrial and agricultural applications.
- Agricultural and fertilizers dominate the application type market segment due to high fertilizer production, which is essential for modern agriculture.
- Asia-Pacific commands a substantial 45% share of the global ammonia market, mainly fueled by widespread agricultural activities and increasing demand for ammonia-based fertilizers.
Driving Factors
Demand of Fertilizers
This surge in demand is closely tied to the growing global population and the urgent need to enhance agricultural productivity, particularly in emerging economies. The International Energy Agency (IEA) predicts a nearly 40% surge in ammonia demand by 2050, incited by the agricultural sector's expansion in regions like Africa, Latin America, the Middle East, and Southeast Asia. This trend underscores ammonia's pivotal role in addressing food security challenges, thereby supporting its market growth.
Low-Carbon Energy Transition compels the market
Ammonia, especially in its 'green' or 'blue' forms, is gaining traction as a sustainable energy carrier. This is due to its potential for storing and transporting hydrogen energy efficiently. This shift not only augments current market growth but also sets a trajectory for sustained expansion, aligning with global environmental goals. The rising emphasis on clean energy solutions positions ammonia as a critical component in the energy transition, catering to the increasing demand for eco-friendly fuel alternatives.
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Restraining Factors
Huge Competition from Substitute Products
Alternative feedstocks like natural gas and urea are currently competing with ammonia for various uses, which poses a threat to the growth of the ammonia market. Urea, for instance, is often desired for certain agricultural and industrial applications due to its less hazardous nature. The growing innovations in electric vehicles (EVs) are reducing the demand growth for fertilizers, which traditionally constitute a significant portion of ammonia's market. As EVs become more prevalent, the reduced need for agricultural products for biofuel production could further impact the demand for ammonia-based fertilizers, challenging the market's expansion.
Growth Opportunities
New Technological Advancements
The conventional production of ammonia is energy-intensive and contributes to about 2% of global CO2 emissions. In response, there's a significant push towards developing bioprocessing technologies for biological ammonia production. Firms like OCI Global, the only producer of ISCC PLUS certified bio-ammonia in Europe and the US, are leading this charge. OCI’s use of biomethane from organic waste for ammonia production results in a GHG reduction of over 70% compared to traditional methods. Such advancements are not only environmentally beneficial but also offer a competitive edge, paving the way for geographic and product expansion in the ammonia market.
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| Report Attribute | Details |
| Market Value (2023) | US$ 220.93 Billion |
| Market Size (2033) | US$ 472.5 Billion |
| CAGR (from 2024 to 2033) | 8.11% from 2024 to 2033 |
| Asia-Pacific Region Revenue Share | 45% |
| Historic Period | 2016 to 2023 |
| Base Year | 2023 |
| Forecast Year | 2024 to 2033 |
Regional Analysis
Asia-Pacific commands a substantial 45% share in the global ammonia market, mainly fueled by widespread agricultural activities and increasing demand for ammonia-based fertilizers. China, India, Thailand, Japan, South Korea, and Australia contribute significantly to this supremacy. The region's growth is also compelled by its growing industrial sector, incorporating ammonia in applications like plastics and fibers. Notably, Asia-Pacific displays innovative approaches to green energy, demonstrated by joint initiatives in hydrogen and ammonia production in Japan and South Korea, bringing into line with the region's commitment to sustainable practices. In contrast, North America influences advanced technologies and natural gas for cost-effective, large-scale ammonia production, while Europe highlights sustainability by discovering renewable sources and green technologies to decrease its carbon footprint.
Segment Analysis
By product type, liquid ammonia rules the market segment due to its extensive use in various industrial and agricultural applications. Its high nitrogen content makes it essential for synthesizing ammonium nitrate and urea, which are widely used as nitrogenous fertilizers. In refrigeration, liquid ammonia serves as an effective coolant due to its high heat of vaporization and compatibility with various refrigeration systems. Gaseous ammonia, while also important, has a more specialized application scope. The powder form of ammonia, though less common, finds niche applications in certain industrial processes. The dominant position of liquid ammonia on the market is evident in its broad range of applications and its effectiveness and efficacy in industrial and agricultural applications.
By application type, agricultural fertilizers dominate the market segment due to high fertilizer production, which is essential for modern agriculture. The synthesis of ammonium nitrate, urea, and other nitrogenous fertilizers relies heavily on ammonia. In the textile industry, ammonia is used in the pre-treatment of fibers and dyeing processes. As a refrigerant, ammonia's efficiency in large industrial refrigeration systems is well recognized. The agricultural sector's reliance on ammonia-based fertilizers for crop production and the critical role of these fertilizers in global food security make agriculture and fertilizers the most significant application segment in the ammonia market.
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Segments covered in this report
By Product Form
- Liquid
- Gas
- Powder
By Application
- Agriculture & Fertilizers
- Textiles
- Refrigerants
- Pharmaceuticals
- Textile
- Others
By Geography
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa
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Competitive Landscape Analysis
CF Industries Holdings Inc., Yara, and Nutrien Ltd rule the Ammonia Market with significant production capacities and global distribution networks, highlighting operational efficacy and sustainability to meet the growing global demand. SABIC Agri-Nutrients Company and IFFCO play vital roles in the agricultural sector, innovatively contributing to crop production and prominence the industry's commitment to global food security.
Key Players
- SABIC Agri-Nutrients Company
- EuroChem
- Nutrien Ltd
- Group DF
- OCI
- IFFCO
- QATAR FERTILISER COMPANY
- Yara International ASA
- CF Industries Holdings Inc.
- LFC
- BASF SE
- Trammo
- Mitsubishi
- Koch Industries Inc.
- Mitsui
Recent Developments
- In June 2023, BASF SE and Yara Clean Ammonia announced their partnership for joint research to develop and establish a world-scale low-carbon blue ammonia production plant with an overall production capacity in the range of 1.2 up to 1.4 million tons per year that will also capture carbon throughout the US Gulf Coast region. By collaborating both companies will meet the ever-growing demand in the world for ammonia with low carbon.
- In May 2023, SABIC Agri-Nutrients Company and IFFCO announced a partnership to deliver 5,000 metric tonnes of low-carbon ammonia certified coming from Saudi Arabia to IFFCO for fertilizer production. This partnership will help improve the company's operations in the researched market.
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