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May 29, 2024Global Ammonia Market Snapshot
The ammonia industry represents a key and vital component of the chemical economy serving as a significant source of revenue and employment, in particular within countries with significant availability of feedstocks such as natural gas and coal. The principal application of ammonia is within the fertilizer sector, which is critical to agricultural production and the wider world economy.
Ammonia is a key intermediate for fertilizers such as urea, ammonium nitrate, ammonium phosphate and NPK compounds as well as a variety of industrial applications such as synthetic resins (urea-based), synthetic fibres (acrylics and nylons), polyurethanes, explosives (ammonium nitrate-based) and refrigeration. Urea accounts for over 50 percent of ammonia demand globally.
Fertilizer demand growth is a function of:
- Population growth
- GDP growth
- Government policies on tariffs and subsidies
- Environmental implications of fertilizer use including biofuels.
The historic and projected rise in global population, the main driver for fertilizer growth, unsurprisingly varies significantly by region. Asia Pacific and Africa are forecast to have a rapid increase in population size, while in Western Europe and North America’s population is expected to remain broadly constant through to 2045. Therefore, demand growth for food and hence fertilizers such as ammonia and urea are expected to be significantly higher in Asia Pacific and Africa than in the West over the outlook period.
Ammonia is also currently being considered as an alternative to fossil fuels for power generation and transportation particularly in the maritime industry however the industrial and commercial viability of ammonia as a fuel has not yet been proven.
Global ammonia demand in 2023 exceeded 190 million tons, an increase of around four percent from 2022, driven by higher fertilizers production as global gas prices corrected. Near term ammonia demand expected to continue to be supported by fertilizer production. However, long term demand will mostly be supported by sustainable solutions such as marine fuels, power generation and energy carrier applications as the world moves towards a low carbon future.
Ammonia Demand Globally, 2024
Ammonia production is highly fragmented as the largest producer only accounting for about three percent of the global capacity. China dominates the market, accounting for almost one-third of global capacity. However, facilities in China mostly use coal as a feedstock, which is less cost-effective than natural gas. Coal-based capacity is expected to experience temporary shutdowns during periods of low demand. Many smaller, less efficient plants have recently closed in China, while larger, more economical plants have emerged. This has led to net capacity growth, which offers better financial protection in times of economic downturn.
In the efforts to decarbonize, global ammonia capacity expected to shift from the conventional gas and coal-based ammonia to a cleaner/greener alternatives such as blue and green ammonia. This is supported by the rapidly growing demand for greener fertilizers and fuels.
In the near term, blue and green capacities are expected to increase based on new projects or development entirely. However, in the medium to long term, as demand for low carbon or green ammonia increases, existing grey ammonia capacities are expected to be retrofit with low carbon production technologies such as CCUS and electrolyzers, transforming them into blue and green ammonia. Hence, grey ammonia capacity is speculated to decrease in the medium to long term forecast to be replaced by blue and green capacity.
Find out more…
Market Analytics: Ammonia – 2024
This report provides analysis and forecasts to 2050 of supply and demand of the global ammonia industry. This analysis identifies the issues shaping the industry as well as provide demand, supply and net trade data for 40 countries/regions. Ammonia demand is segmented by key end-use including ammonium nitrate fertilizers, ammonium phosphate fertilizers, direct application fertilizer, industrial, other nitrogen fertilizers, urea, marine fuels and power generation.
The report captures:
- Consumption: Assesses historic and forecast consumption; forecasts are based on projections of end use and economic activity.
- Supply: Includes a list of all producers, their production capacity, location, etc., and discussion of the status of new projects.
- Supply, Demand and Trade: Provides historical analysis and forecasts to 2050 of consumption, production, imports/exports, inventory build-up/decline, capacity and capacity utilization.
NexantECA has also utilized its long standing knowledge in the energy and fuels sector to forecast the consumption of ammonia in emerging end uses including marine fuels and power generation.
Market Scenario Planning: Green Ammonia – 2023
This report provides NexantECA’s scenario forecast for green ammonia demand out to 2045 by key region and application (marine fuel, power generation, hydrogen carrier, fertilizer derivatives and industrial end uses). Scenarios forecast demand based on low, base and high assumptions whereby underlying policy, cost learning curves and adoption of green ammonia in each application evolves in fundamentally different ways. As well as the scenarios, detail on the current situation of the market and key market drivers (carbon intensity, market pressure, cost competitiveness and policy) are provided.
This report is part of our Market Scenario Planning program which looks at emerging products, market events and end-use industries where scenario forecasting provides more value due to the higher uncertainty associated with the subject. Scenarios are defined as low, base and high and are informed by NexantECA’s expert knowledge of chemical, fuel and fertilizer markets.
About Us - NexantECA, the Energy and Chemicals Advisory company is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms. Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies and economics, NexantECA provides solutions that our clients have relied upon for over 50 years.
