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The global ammonia market is expected to record a CAGR of over 5% during the forecast period. 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.
- The hazardous effects of ammonia in its concentrated form is 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 is further expected to remain the same in the future.
Key Market Trends
Agriculture Industry Dominates the Market
- The agriculture industry dominates the global ammonia market, with an estimated market share of more than 80%. Ammonia is majorly used in fertilizers, and its usage has only been increasing through the years, thereby, 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.
- According to Fertilizer Outlook 2018 – 2022, the demand for fertilizer is increasing modestly in the global market, owing to ample inventories and low prices for most crops. This is improving economic prospects in developed countries, Russia, Brazil, and Sub-Saharan Africa. It is also improving the growing political uncertainty in several large fertilizer-consuming markets.
- 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, and is rapidly replacing ammonium nitrate in the recent years.
- Overall, the rising fertilizer market is expected to drive the ammonia consumption through the forecast period.
Asia-Pacific to Dominate the Ammonia Market
- Asia-Pacific dominated the ammonia market, accounting for more than half of the consumption globally. With the increasing population in the countries, like China and India, the agricultural activities have increased, which has resulted in the increased consumption of ammonia-based fertilizers, thereby driving the market.
- Apart from the agriculture industry, the demand for ammonia is increasing in industries, such as pharmaceutical, paper and pulp, food, petroleum, etc.
- China was the major consumer of ammonia in both the Asia-Pacific region and in the global market.
- The fertilizer sector is among the fastest growing industries in China. China is also the largest consumer of fertilizers in the world. Being the most populous country in the world, it has a huge demand for agricultural products. With just 11.3% arable land, there is a need to produce the crop with a higher yield in order to meet the demand. In this way, the demand for food grains is driving the fertilizers market.
- China is currently the largest consumer and exporter of all three NPK macronutrient fertilizers (nitrogen, phosphorus, and potassium) globally.
- Chinese farmers use an average of 305 kilograms of nitrogen per hectare per year, which is more than four times the global average. The country has also been a significant contributor to the increased use of fertilizers in the global market.
- China is a hub for chemical processing, accounting for a major chunk of the chemicals produced across the world. With the growing demand for organic and inorganic chemicals worldwide, the demand for ammonia from this sector is projected to grow over the forecast period.
- Overall, the market for ammonia in Asia-Pacific region is anticipated to grow significantly through the forecast period.
The global ammonia market is fragmented in nature. The major companies include BASF SE, Qatar Fertiliser Company, SABIC, CF Industries Holdings Inc., and EuroChem.
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