Ammonia Market Analysis

Global Ammonia Market Overview

Ammonia Market Size was valued at 53.23 billion in 2023. The Ammonia industry is projected to grow from 55.94 billion in 2024 to USD 83.29 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.10% during the forecast period (2024 - 2032).Ammonia is a colorless inorganic compound of nitrogen and hydrogen with a characteristic pungent smell. It is mainly produced using natural gas, through the Haber process, in which nitrogen and hydrogen react in the presence of an iron catalyst to form ammonia. The molecular structure of ammonia consists of a trigonal pyramid shape, with nitrogen atom at the apex and three hydrogen atoms forming the base. Ammonia is soluble in water owing to it is used in various types of applications. It is an important industrial chemical used in a wide range of industries including fertilizer, chemicals, refrigeration, fibers, and plastics, pharmaceutical, pulp and paper, among others. Ammonia is used in the synthesis of fertilizers owing to which it is very crucial for the agriculture sector. In refrigeration, ammonia is used as a refrigerant due to its excellent heat absorbing properties. Ammonia based refrigeration systems are known for their high efficiency and are used in numerous commercial and industrial cooling applications.

Ammonia Market Trends

• GROWTH AND EXPANSION OF AGRICULTURAL INDUSTRY

The global demand for ammonia is mainly driven by the growth of the fertilizers industry. Most of the ammonia produced is consumed by the fertilizers industry. Some of the commonly produced fertilizers through ammonia are urea, ammonium nitrate, ammonium sulfate, ammonium phosphate, diammonium phosphate, monoammonium phosphate, nitric acid, sodium bicarbonate, and sodium carbonate. According to the United Nations, the world’s population is likely to exceed 8.6 billion by 2030. Thus, the increasing demand for food coupled with the growing consumption of protein-rich diets, fruits, and vegetables is expected to boost the demand for fertilizers in the agricultural industry. According to the International Fertilizer Association, the consumption of fertilizers accounted for 192.5 million metric tons in 2023.

The demand for ammonia in the agricultural industry is being driven by the expansion of the sector in developing economies such as India, China, the US, and Thailand, in response to the growing population. North America, particularly the US, is a significant market for ammonia due to its increasing agricultural production and export capabilities. The US is a leading producer and supplier of agricultural products, and the rising demand for corn, cereals, and other related products is fueling the growth of both the agricultural industry and the ammonia market in the country.

INCREASING APPLICATIONS IN THE REFRIGERATION SYSTEMS

The increasing applications of ammonia in refrigeration systems have been a significant driver of its demand. Ammonia refrigeration systems are widely used in various industries, including food processing plants, cold storage facilities, and large-scale industrial cooling applications. Ammonia is known for its excellent thermodynamic properties, making it an efficient refrigerant choice. It has a wide application range, from high to low temperatures, and is highly effective in transferring heat through a vapor-compression refrigeration cycle. This ensures that products and materials are stored at desired temperatures, maintaining their quality and freshness.

The application of ammonia in refrigeration systems has demonstrated its numerous benefits over several decades. Ammonia is widely recognized as one of the most efficient refrigerants available, offering exceptional energy efficiency and cost-effectiveness in operating. Additionally, its environmental friendliness, as it does not contribute to global warming, has further fueled its adoption of refrigeration systems. To meet the evolving demands of various industries, ammonia refrigeration systems have undergone continuous advancements. The industry's focus on energy consumption and sustainability has sparked interest in ammonia as a greener alternative to other refrigerants. This is particularly significant due to refrigerant legislation imposing restrictions on alternatives containing chlorine and fluorine components.

Increasing Use of Ammonia as A Biofuel

Ammonia, produced using renewable resources, is preferred as a hydrogen fuel cell in the transportation industry as it possesses high energy density compared to that of liquid hydrogen. It can be converted back into hydrogen and nitrogen. The use of ammonia as a green fuel alternative is increasing primarily in India, Australia, and China.

In recent years, there have been significant developments and investments in the production and utilization of green hydrogen and green ammonia. For example, in June 2023, the government of Andhra Pradesh in India has implemented a policy targeting the production of green hydrogen and green ammonia, with incentives provided to developers of such projects such as 100% reimbursement of net state goods & service tax on the sale of green ammonia or green hydrogen for 5 years from the projects commissioning date. Similarly, in November 2023, the state of Odisha in India has approved investment proposals for four green hydrogen-based ammonia and methanol plants worth USD 5.5 billion.

Moreover, in July 2023, the construction of the world's largest green ammonia plant has commenced in China, indicating the growing interest and investment in this sector. The plant is expected to produce 32,000 tons of green hydrogen and 180,000 tons of ammonia annually. The increasing demand for greener alternatives, driven by environmental regulations and the shift towards hydrogen fuel cell vehicles, is also expected to drive the demand for ammonia. Japan, in particular, is leading the way in the adoption of hydrogen fuel cell vehicles and aims to create a hydrogen society, investing billions of dollars in hydrogen technology.

Ammonia is not only being considered as a fuel alternative in the transportation industry but also in power generation applications and industrial furnaces. Its use in gas turbine systems and as an alternative fuel offers promising opportunities for market players. Thus, the growing focus on green hydrogen and green ammonia, coupled with the increasing demand for greener alternatives in various industries, indicates potential growth opportunities in the ammonia market.

Ammonia Market Segment Insights:

Ammonia Market by Type Insights

The global Ammonia Market segmentation, based on Type has been segmented as Aqueous and Anhydrous. Among these, the Anhydrous segment is projected to dominate the global Ammonia market revenue through the projected period. This is due to its ease of administration and its abundant availability for the farmer. NH3-based nitrogenous fertilizers offer high yield, better crop protection and enhanced production cycle. This anhydrous form of fertilizer is widely used in agriculture due to its high nitrogen content of 82%. However, liquefied anhydrous form is used in the production of synthetic fibers, such as nylon and rayon. Due to its ability to dissolve a wide range of polymers, making it an ideal solvent for spinning process.

Ammonia Market by End Use Insights

Based on End Use, the Ammonia market has been segmented into Fertilizer, Chemicals, Refrigeration, Fibers, and Plastics, Pharmaceutical, Pulp and Paper and Others. In 2022, the Fertilizer is projected to dominate the global Ammonia market revenue through the projected period. Nitrogenous fertilizer is widely used by farmers because of their high solubility which allows them to be absorbed by plants quickly and efficiently. That helps to provide necessary nitrogen for plants more quickly than organic fertilizer, which takes time to decompose and release their nutrients. Not only this but also ammonia is widely used as a refrigerant due to its excellent thermodynamic properties.

Ammonia is widely used as a refrigerant because of its excellent cooling properties. Unlike CFC and HFC refrigerants, NH3 has no ozone depletion potential, is not global warming, and is not flammable. It is cheap and easily available. In addition, NH3 is primarily used in smaller refrigeration applications such as ice rinks, cold storage facilities, and food processing plants. It is also used in large industrial refrigeration applications such as the chemical, petroleum, and gas processing industries.

Ammonia Market Regional Insights

By region, the global market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East, and Africa. Among these, Asia Pacific emerged as the leading and the fastest-growing segment. According to International Energy Agency China is the largest producer of ammonia and largest consumer of nitrogenous fertilizers in the world. According to the Ammonia Energy Association India is also one of the world’s largest producers of ammonia. Majority of products are produced in India is directly converted to urea, which is further used as a fertilizer.

North America is the second largest producer of ammonia due to increasing the use of ammonia as a fertilizer in agriculture. This rising need for ammonia is due to rising population and increased crop productivity.

Ammonia Key Market Players & Competitive Insights

The global market for ammonia is projected to witness healthy growth during the forecast period, owing to the significant growth of the agricultural industry in the developing economies such as India, China, and Thailand. Ammonia is a crucial component in the production of nitrogen-based fertilizers, which are essential for enhancing crop yields. As the agricultural industry expands, there is a growing need for fertilizers to meet the increasing demand for food and feed. Ammonia, being a primary raw material for nitrogen fertilizers, experiences a rise in demand as agricultural activities intensify. The other key factor favoring the market growth is the increasing use of ammonia over hydrofluorocarbons as a refrigerant in the large refrigeration plants owing to its superior advantages such as cost efficiency, energy efficiency, environmental friendliness, better heat transfer properties, regulatory restrictions on HFCs, and safety advantages.

CF Industries Holdings Inc, Yara, Nutrien Ltd, OCI, SABIC Agri Business, and OCI are the prominent players operating in the global ammonia market. These players account for a majority of the global market share owing to their large production capabilities, global revenue base, availability of low-cost raw material, patented production facilities, and global distribution network. Additionally, the adoption of various strategies such as expansion, R&D, agreements, acquisitions, and investments is expected to help these players to gain maximum revenue and long-term growth during the forecast period.

Key Companies in the Ammonia Market includes:

• CF Industries Holdings, Inc.


• Nutrien Ltd.


• Group DF


• OCI


• SABIC Agri-Nutrients Company


• Koch Fertilizer, LLC


• Togliattiazot


• AB "Achema"


• Uralchem JSC


• Yara

Ammonia Industry Developments

November 2023: Dmitry Mazepin, the CEO of Uralchem, announced that the company plans to invest RUB 50 billion in the construction of a port in Taman, located in the Krasnodar Territory. This port will be specifically designed for the handling and transportation of ammonia.

March 2021: OCI N.V. has entered into agreements with MAN Energy Solutions, Hartmann Group, and Eastern Pacific Shipping to establish a marine value chain and commence commercialization by 2023/24 of ammonia and methanol as future shipping fuels. This collaboration aims to drive the energy transition and decarbonization of the shipping industry by utilizing ammonia and methanol as sustainable alternatives.

Ammonia Segmentation

Ammonia Type Outlook

• Aqueous


• Anhydrous

Ammonia End Use Outlook

• Fertilizer


• Chemicals


• Refrigeration


• Fibers and Plastics


• Pharmaceutical


• Others

Ammonia Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Russia
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • South Korea
  
  
  • Australia & New Zealand
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Middle East & Africa
  
  
  
  • GCC Countries
  
  
  • South Africa
  
  
  • Rest of Middle East & Africa
  
  
  
  


• Latin America
  
  
  
  • Brazil
  
  
  • Argentina
  
  
  • Mexico
  
  
  • Rest of Latin America