The global ammonia market is predominantly driven by the increasing demand for nitrogen-based fertilizers from the agricultural industry. Ammonia is a key ingredient in the production of various nitrogen fertilizers such as urea, ammonium nitrate, ammonium sulfate, and calcium ammonium nitrate, which are extensively used to improve crop yield. Fertilizer manufacturers utilize around 80-85% of total ammonia production for the manufacture of nitrogenous fertilizers. The rising global population and increasing demand for food has encouraged farmers to use fertilizers for higher agricultural productivity.
The Global ammonia market is estimated to be valued at US$ 82.76 Bn in 2024 and is expected to exhibit a CAGR of 6.1% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the ammonia market are Yara International ASA, BASF SE, CF Industries Holdings, Inc., Nutrien Ltd., Potash Corporation of Saskatchewan Inc., Dangyang Huaqiang Chemical Co., Ltd., Shanxi Jinfeng Coal Chemical Co Ltd., GTS Chemical Holdings plc.,Togliattiazot, OCI Nitrogen B.V., Agrium Inc., Sabic, and Koch Fertilizer, LLC.The key opportunities in the Ammonia Market Demand include growing adoption of ammonia in industrial applications and expansion in refrigerants and pharmaceutical sectors. The market is driven by increasing demand for nitrogen-based fertilizers from the agricultural industry.The increasing food demand and declining arable land have forced farmers to use more fertilizers for higher yield, which is driving the growth of the global ammonia market. Key players are also investing in capacity expansion projects across major markets to cater to the rising demand.
Market Drivers
The rising global population coupled with decreasing arable land per capita has increased the demand for food over the years. According to UN estimates, the world population is expected to reach nearly 10 billion by 2050. Ensuring food security for over 10 billion people would require a substantial increase in agricultural productivity. Therefore, farmers are compelled to use more fertilizers like ammonia-based products to boost their yield, which is a major growth driver for the ammonia market. Additionally, the growth in non-agricultural applications such as refrigerants and pharmaceuticals will further support the demand for ammonia over the forecast period.
PEST Analysis
Political: The production and use of Ammonia Market Analysis is regulated by environmental laws. Stringent regulations can negatively impact production capacities.
Economic: Changes in global economic conditions directly impact the demand in end-use industries such as agriculture and construction that are major consumers of ammonia. Higher prices of fossil fuels also affect overall production costs.
Social: Rising global population and changing dietary preferences increases the need for fertilizers, boosting agricultural production and ammonia demand.
Technological: Advanced production technologies facilitate higher output efficiencies while minimizing energy usage. New recycling methods aid in reducing carbon footprint. Emerging technologies also explore renewable feedstock options to replace conventional natural gas feed.
Value concentration in geographical regions
North America accounts for the largest share of the total ammonia market value, mainly due to strong demand from agricultural and industrial sectors in countries such as the United States and Canada. Asia Pacific follows closely, driven by demand growth in major economies like China and India where ammonia finds extensive application as nitrogen fertilizer.
Fastest growing region
The Asia Pacific region, especially China and India, is expected to witness the highest growth rate during the forecast period due to rising agricultural production to meet growing food requirements of the expanding population as well as rapid industrialization. Establishment of new fertilizer plants coupled with capacity expansions of existing facilities augments regional ammonia demand.
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