Ammonia Market

Market Perspective

The global Ammonia Market was valued at USD 79.63 billion in 2022 and is projected to reach USD 108.19 billion by 2030, growing at a CAGR of 4.07% from 2023 to 2030.

The global ammonia market has experienced consistent growth in recent years, driven by various factors such as population expansion, urbanization, and the widespread use of ammonia in various industries. Ammonia plays a crucial role in fertilizer production, supporting the need for higher crop yields and food supply. Additionally, it is widely used in the chemical industry for manufacturing products such as plastics and fibers. The adoption of ammonia as a refrigerant in industrial and commercial applications has further contributed to its increasing demand.

Additionally, the growth of the market is expected to continue in the upcoming years due to the industry's growing focus on sustainable practices and the rising demand for clean energy sources. Ammonia's potential as a fuel for power generation aligns with the global shift towards renewable energy. Furthermore, advancements in production and storage technologies have enhanced the feasibility and attractiveness of ammonia as a commercial product.

Overall, the global ammonia market presents lucrative opportunities for businesses operating in the agriculture, chemicals, refrigeration, and energy sectors. Effective strategic positioning in this market can enable companies to capitalize on their promising prospects and bolster the growing demand for ammonia.

Analyst’s Review on Ammonia Market

The global ammonia market is projected to witness substantial growth in the upcoming years, driven by several factors. One of the key factors contributing to this growth is the increasing demand for ammonia in the agricultural sector. Ammonia is widely used as a fertilizer, as it provides essential nutrients to crops and helps improve soil fertility. Additionally, the rising population and the growing need to enhance agricultural productivity are fueling product demand. Moreover, ammonia is extensively used in the production of various industrial chemicals such as nitric acid, urea, and ammonium nitrate. These chemicals find applications in the manufacturing of plastics, textiles, and explosives, among others.

As industrialization continues to expand globally, the demand for ammonia as a raw material in these sectors is expected to surge. Furthermore, the increasing implementation of government initiatives to promote sustainable agriculture practices and reduce greenhouse gas emissions is likely to drive the growth of the ammonia market. Overall, with the combination of agricultural and industrial demand, the global ammonia market is poised to record significant growth in the foreseeable future.

Market Definition

Ammonia is a compound that consists of one nitrogen atom and three hydrogen atoms, with the chemical formula NH3. It is a colorless gas with a pungent smell and is commonly used in various industries. Ammonia is highly soluble in water and forms a strong alkaline solution, making it a versatile chemical compound utilized in various applications. Some of the applications of ammonia include its use as a fertilizer in agriculture, as a refrigerant in cooling systems, and as a cleaning agent in household products. It is further used in the production of various chemicals, such as pharmaceuticals, plastics, and explosives. However, it is important to handle ammonia with caution as it can be toxic and cause harm to humans and animals if not used properly.

Additionally, ammonia is known for its distinct and pungent smell, which can be enormous even in small quantities. Its high solubility in water makes it an excellent choice for use in industries such as agriculture, where it is commonly used as a fertilizer due to its ability to provide essential nutrients to plants. Moreover, ammonia's alkaline nature makes it an ideal refrigerant, as it can efficiently absorb heat and maintain low temperatures in cooling systems. 

Market Dynamics

The growth of the ammonia market is being driven by increased demand for agricultural products due to its crucial role as a key component in the production of fertilizers. As the global population continues to rise, there is a growing need to maximize crop yields to ensure food security. Ammonia-based fertilizers play a vital role in increasing agricultural productivity by providing essential nutrients such as nitrogen to plants. With the expanding demand for food, the agricultural industry is increasingly relying on ammonia-based fertilizers to enhance soil fertility and promote healthy plant growth. As a result, the ammonia market is expected to witness steady growth in the coming years.

Furthermore, advancements in technology have allowed for the development of more efficient and environmentally friendly ammonia production processes, thereby supporting market growth. Additionally, the increasing awareness about sustainable farming practices and the rising need to reduce chemical surplus has led to the adoption of precision agriculture techniques, which rely heavily on ammonia-based fertilizers. Overall, the ammonia market is poised for substantial expansion as the agricultural sector continues to prioritize productivity and sustainability.

However, the volatility in raw material prices has emerged as a significant obstacle in the growth trajectory of the ammonia market. Fluctuations in the prices of key raw materials such as natural gas, coal, and oil directly impact the production cost of ammonia, making it challenging for manufacturers to maintain stable pricing and profitability. For instance, when the prices of natural gas, the primary feedstock for ammonia production, skyrocketed in recent years due to supply disruptions or geopolitical tensions, it led to a significant increase in production costs for ammonia manufacturers. This, in turn, compelled them to either accept the higher costs, resulting in reduced profit margins or pass on the increased costs to consumers, potentially reducing demand and hampering the growth of the market.

Segmentation Analysis

The global ammonia market is segmented based on product, end use, and geography.

Based on product, the market is bifurcated into powder, liquid, and gas. Liquid ammonia acquired the largest market share of 43.61% in 2022. The dominance of the segment is mainly propelled by its numerous advantages and wide range of applications. One key factor contributing to this growth is its versatility as a transportation and storage medium. Unlike gaseous ammonia, which requires high-pressure cylinders or specialized infrastructure, liquid ammonia can be easily transported and stored in bulk tanks, making it more convenient and cost-effective for industries. Additionally, the liquid form allows for precise and controlled dosing, thus enabling efficient use in various sectors such as agriculture, refrigeration, and chemical manufacturing. This flexibility has positioned liquid ammonia as the preferred choice for industries seeking reliable and efficient ammonia solutions.

Based on end use, the market is bifurcated into agriculture, refrigeration, pharmaceuticals, textile, explosives, and others. The agriculture segment dominated the ammonia market with a share of 67.02% in 2022, due to its extensive use in fertilizer production. Ammonia, with its high nitrogen content, is a vital component in the manufacturing of various types of fertilizers, including urea, ammonium nitrate, and ammonium phosphate. The growing global population and increasing food demand have led to a surge in agricultural activities, thereby driving the demand for ammonia in the agriculture sector.

Geographical Analysis

Based on region, the global ammonia market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

Asia Pacific registered the highest market share of 48.11% in 2022, primarily due to its robust agricultural sector, which heavily depends on ammonia-based fertilizers. Countries such as China and India, known for their large populations and extensive arable land, exhibit a substantial demand for ammonia to cater to their agricultural requirements. Moreover, the expanding industrial sector in the region, particularly in nations such as Japan and South Korea, contributes significantly to the demand for ammonia across various industries viz., chemicals, pharmaceuticals, and refrigeration. The prominence of the Asia-Pacific region in the ammonia market is further strengthened by the presence of major ammonia producers and exporters, including China, Indonesia, and Malaysia. These countries benefit from cost-effective production methods, ample reserves of natural gas, and efficient supply chains, solidifying their positions as significant participants in the global ammonia market.

Latin America is expected to be the fastest-growing region over the forecast period due to increasing agricultural activities in the region, which rely extensively on ammonia-based fertilizers. Additionally, with a large portion of the population engaged in farming and the growing demand for food, the need for ammonia as a fertilizer has increased rapidly in recent years. Additionally, Latin America boasts vast reserves of natural gas, a primary feedstock for ammonia production, making it a cost-effective and convenient location for ammonia manufacturers. Furthermore, the region's favorable climate and diverse soil conditions enhance its agricultural productivity, thereby increasing the demand for ammonia-based fertilizers. Additionally, the rising awareness of sustainable agriculture practices in the region has led to a shift towards organic farming, which still relies on these fertilizers, thereby boosting market expansion in Latin America.

Competitive Landscape

The global ammonia market study will provide valuable insights with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers & acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing extensively in R&D activities, building new manufacturing facilities, and supply chain optimization.

The major players in the Ammonia Market are:

• Acron
• Koch Fertilizer, LLC
• Yara
• CF Industries Holdings, Inc.
• Nutrien Ltd.
• Qatar Fertiliser Company
• Togliattiazot
• SABIC
• Sumitomo Chemical Co., Ltd.
• Orica Limited

Key Developments

• May 2022 (Investment): Thyssen Krupp Uhde USA and Bloom Energy announced their joint venture to produce about 30,000 tonnes of greener ammonia annually at LSB Industries' facilities in Pryor, Oklahoma. This initiative aims to transform a small percentage of Pryor's current conventional ammonium production into greener ammonia.
• Mar 2023(Acquisition): CF Industries Holdings, acquired the Waggaman Ammonia Production Facility from Incitec Pivot Limited, an Australian multinational corporation that specializes in fertilizer and explosives manufacturing for agricultural and industrial markets.

The global Ammonia Market is segmented as:

By Product

• Powder
• Liquid
• Gas

By End User

• Agriculture
• Refrigeration
• Pharmaceuticals
• Textile
• Explosives
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America.