Market Trends of Ammonia Industry
Agriculture Segment to Dominate the Market
- According to the World Economic Forum, ammonia plays a vital role in agriculture and the global food supply chain. Ammonia has also been recognized as a future energy source for clean hydrogen.
- Ammonia binds nitrogen from the atmosphere and produces the primary crop nutrients using the absorbed nitrogen, which is then used to produce nitrogen fertilizers. As an essential raw material for fertilizer production, ammonia improves crop health and, in the long run, maintains and even increases soil fertility.
- According to the United Nations, the world population continues to grow and will reach 9 billion by 2050. By then, on the same land area, the demand for food production is expected to increase by 60%. Achieving food security requires the availability of sufficient, nutritious food at affordable prices. This can be achieved through the use of optimized fertilizers.
- The United States is among the top importers of the three major fertilizer ingredients. Major producers of the main fertilizer components include China, Russia, Canada, and Morocco. In March 2023, the US Department of Agriculture (USDA) announced to give the first two rounds of a new grant program to expand innovative production for domestic fertilizer production capacity in 47 states and two territories. The USDA further announced that it received USD 3 billion in applications from more than 350 independent companies, thus highlighting significant recovery in the country's fertilizer industry.
- Furthermore, the USDA also announced its first USD 29 million grant offering in the first round. The subsidy will help independent companies increase their production of American-made fertilizers and encourage healthy competition.
- In March 2023, CBH Group announced the opening of its new Kwinana Fertilizer Plant, which will benefit grain farmers in Western Australia significantly. The project marks the start of CBH's liquid fertilizer business, increasing its granular fertilizer production capacity by 15,000. The new facility has 32,000 tons of urea ammonium nitrate (UAN) storage capacity and 55,000 tons of granular bulk fertilizer.
- All the aforementioned factors are expected to drive the agricultural segment, enhancing the ammonia demand during the forecast period.
Understand The Key Trends Shaping This Market
Download Sample
Asia-Pacific Region to Dominate the Market
- Asia-Pacific region domionates the ammonia market owing to large consumption from the countries such as China, India, japan, and others.
- China is the largest producer and consumer of ammonia in the world. According to US Geological Survey (USGS), the country produced 42 million metric tons in 2022. The demand for ammonia in the country is rising due to increasing applications in the agriculture industry, such as fertilizers, textiles, pharmaceuticals, and mining.
- China leads the world in nitrogen (N) fertilizer consumption. Although using nitrogen fertilizers has contributed significantly to food production in China, the country continues to focus on securing fertilizer supplies and stabilizing prices once the spring farming season of 2023 begins. As a result, the National Development and Reform Commission (NDRC) and 13 other national ministries have issued notices to secure fertilizer supplies and stabilize prices.
- The textile industry also benefits from the capabilities of ammonia. The use of liquid ammonia in tanning is widespread, as well as the use of dyes in textile dyeing. Liquid ammonia plays an important role in the development of synthetic fabrics. The solution of ammonia enables fabric coloring to achieve almost any color.
- Japan has a long tradition in textile production and is one of the largest manufacturers of technical textiles. In order to remain competitive in a global market flooded with cheap textiles from China and other emerging countries, Japan's textile industry is transforming into an industry that specializes in technological and smart textiles. Innovations such as synthetic spider silk and wearable health monitors are among the efforts to differentiate Japan's textile industry.
- According to the Ministry of Finance, the imports of textile yarn and fabric were valued at JPY 1,261,222 million (USD 8859.64 million) in January-December 2022, which was 25.7% higher than the same period of last year.
- According to the Indian Brand Equity Foundation, India's textile and apparel exports (including handicrafts) from April 2023 to October 2023 stood at USD 21.15 billion. The industry is expected to reach USD 190 billion by 2025-26.
- Thus, all the above-mentioned factors are likely to provide the increasing demand for the ammonia market during the forecast period.
Get Analysis on Important Geographic Markets
Download Sample
