Ammonia Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The ammonia market is estimated to reach 197,216.85 kilo tons by 2026, registering a CAGR of 2.03% during the forecast period (2021-2026). The COVID-19 outbreak is likely to bring several short-term and long-term consequences in various industries, such as agriculture, textiles, mining, and other end-user industries, which may affect the ammonia market. The agriculture industry was widely impacted due to supply chain disruption and halt in the production of fertilizer manufacturing companies due to lockdown and workforce shortages, thus, adversely affecting the ammonia market. For instance, across the world, the lockdowns in Europe have greatly disrupted food supply chains. According to Syngenta, about 46% of large European farming businesses have been impacted by the COVID-19 pandemic.

• The major factor that is driving the market studied is the growing demand in the agriculture industry and its increasing usage for the production of explosives. About 80% of the ammonia produced is used in fertilizer to help sustain food production for millions of people in the country. The production of food crops naturally depletes soil nutrient supplies. In order to maintain healthy crops, farmers rely on fertilizers to keep their soils productive. Fertilizers can also help increase levels of essential nutrients, like zinc, selenium, and boron, in food crops.
• The hazardous effects of ammonia in its concentrated form are likely to hinder the growth of the market studied.
• The use of ammonia as a refrigerant is likely to act as an opportunity to the market studied during the forecast period.
• Asia-Pacific dominated the market across the world, with the largest consumption from countries, such as China and India, and it is further expected to remain the same in the future.

Scope of the Report

Ammonia is an inorganic compound composed of a single nitrogen atom covalently bonded to three hydrogen atoms that are an amidase inhibitor and neurotoxin. The ammonia market is segmented by type and end-user industry. By type, the market is segmented into liquid and gas. The ammonia market is segmented by end-user industry into agriculture, textiles, mining, pharmaceutical, refrigeration, and other end-user industries. The report also covers the market size and forecasts for the ammonia market in 15 countries across major regions. For each segment, the market sizing and forecasts have been done based on volume (kiloton).

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Key Market Trends

Agriculture Industry to Dominates the Market

Ammonia, also known as NH3, is one of the most efficient and widely used sources of nitrogen for plant growth. The advantages of ammonia's relatively easy application and ready availability have led to its increased use as a fertilizer. Ammonia is a basic building block for ammonium nitrate fertilizer, which releases nitrogen, an essential nutrient for growing plants, including farm crops and lawns. Moreover, it can be converted into a variety of common N fertilizers.​ The agriculture industry dominates the global ammonia market, with an estimated market share of around 80%. Ammonia is majorly used in fertilizers, and its usage has only been increasing through the years, driving its usage in the agriculture market throughout the forecast period

Fertilizers are plant nutrients that are required for the growth of crops. The fertilizers market is also expected to expand, with agriculture production growing through the years (primarily owing to the growing population, increasing urbanization, and rising disposable income of individuals). Consumption of meat, dairy products, fish, sugar, fruits, and vegetables has been experiencing rapid growth compared to the consumption of cereals. Urea is a dry nitrogen material produced by reacting ammonia with carbon dioxide. It contains the highest percentage of nitrogen among the commonly used dry fertilizers. It is rapidly replacing ammonium nitrate in recent years. After a slow growth of 1.3% in 2018, the demand for agriculture was dropping by 1% in 2019, due to combination of low international prices for most crops, unfavorable weather in important agricultural and fertilizer consuming areas, currency depreciation in some fertilizer-importing countries trade tensions between China and the United States and between Russia and Ukraine, sanctions against Iran, and the increasing emphasis on the more efficient use of fertilizers in developed countries and China.

Although the medium-term outlook for world agriculture remains broadly unchanged, the agricultural production growth rates are steadily declining. Additionally, expectations to improve fertilizer use efficiency and recycle more organic nutrient sources will put pressure on fertilizer demand in developed countries and an increasing number of emerging economies. Although the global fertilizer demand is experiencing slow growth, the demand for ammonia-based products are faring better. The largest growths are projected in South Asia, Latin America, and Southeast Asia. Significant increases in urea demand are expected to contribute to this growth, especially in Latin America and East Asia, including China, for its industrial sectors. Overall, these factors are expected to influence the demand for the global ammonia market.

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