Ammonia market size is likely to experience a substantial boom in the next few years worldwide, powered by increasing demand in agriculture as a fertilizer and growing utilization as a refrigerant in numerous industrial processes.
Agriculture production worldwide has increased considerably in the past couple of decades, primarily due to burgeoning population, rapid urbanization, and rise in people’s household income levels. Nearly 90% of the ammonia produced globally is used in fertilizer to help sustain food production for the world population. Increasing agriculture production and the need to enhance crop yield will bolster ammonia market outlook in the future.
Ammonia is among the most efficient and widely used sources of nitrogen for plants. Advantages such as ready availability and easy application have resulted in its increased application in fertilizers. It is the basic building block for numerous commercial fertilizers including ammonium nitrate. Ammonia can be easily converted into a range of common N fertilizers.
The application of ammonia as a neutralizer, stabilizer, and a source of nitrogen in wastewater treatment, food & beverage, cold storage, pulp & paper, and rubber industries is increasing. It is also being increasingly used in numerous manufacturing products such as plastics, textiles, explosives, paints and coatings. Derivatives of the substance serve as an essential ingredient in many household cleaning products. The wide-ranging uses of ammonia in household and industrial applications are expected to create a heavy surge in its demand, positively impacting the ammonia market trends.
BASF, CF Industries, Dow Chemical, Yara International, Orica, Koch Fertilizer, Agrium (Merged with PotashCorp), Mitsubishi Gas Chemical, China National Petroleum Corporation, Trammo, Linde Group, SABIC, OCI Nitrogen, CSBP, Group DF, Haifa Chemicals, Praxair (Merged with Linde PLC), Incitec Pivot, Jiangsu Huachang Chemical, Togliattiazot, Haldor Topsoe, and Achema are among the major suppliers of ammonia around the world.
These companies are focusing on ramping up sustainable production techniques to meet the growing demand for ammonia. For instance, in May 2021, Yara Pilbara, the western Australian division of Yara International, had partnered with French utility firm Engie Group to build a renewable hydrogen plant for production of renewable ammonia. The facility is scheduled for completion in 2023.
The project is part of the ARENA Renewable Hydrogen Deployment Funding Round and will receive a nearly US$33 million grant from the Australian government.
Citing another instance, in April 2021, CF Industries had announced the new Green Ammonia project to produce ammonia that does not result in carbon emissions. The project is expected to be completed by 2023.
The new project will be based on emerging technology and will produce about 20,000 tons of ammonia per year. The technology, according to CF Industries, is scalable to larger production.
Impact of COVID-19 crisis on ammonia market trends
The COVID-19 pandemic is expected to cause short-term as well as long-term disruptions across numerous industries including agriculture, mining, textiles, and others, which may affect ammonia industry trends to some extent. During 2020, the agriculture sector was severely impacted due to supply chain disruption and reduced production of fertilizers. Lower production output can also be linked with lockdown restrictions and workforce shortages.
Even though agriculture production declined significantly amid the pandemic, ammonia consumption in food & beverage and pharmaceutical sectors has remained constant. The ease of government restrictions in the near future could bring new growth opportunities for the ammonia market.