Fosters Growth by Growing Itself

Ceresana Analyzes the Global Ammonia Market

04-Oct-2012 - Germany

ammonia is one of the world's most produced chemicals. Due to its high nitrogen content, ammonia is mainly used as a fertilizer or as the base material for the production of other fertilizers, such as urea or fertilizer mixes. Additionally, ammonia is used in industrial applications, for example refrigeration engineering, cleaning, textile finishing, and the manufacturing of various other chemical products.

Increased demand on the part of both industry and agriculture

The market research institute Ceresana is forecasting the global ammonia market to generate revenues of approx. US$102 billion in 2019. Continuous growth of population in developing and emerging countries is likely to cause demand for foodstuffs to increase even further. As the amount of arable land declines, ammonia-based nitrogen fertilizers will continue to gain importance in the future. The industry as well is likely to increase ammonia demand once the effects of the global economic crisis have worn off.

Strong growth impulses from populous countries

Most important sales market for ammonia is Asia-Pacific that consumes about half of global demand. Populous emerging countries such as China and India in particular are likely to continue to increase demand for ammonia at dynamic rates. However, the Middle East is also expected to generate above-average growth rates due to the construction of facilities in downstream industries, e.g. urea production.

New technology as basis for cost-effective production in the USA

Production locations are undergoing a geographical shift towards Asia-Pacific and the Middle East. "Global ammonia capacity of currently about 198 million tonnes is likely to increase by about 35 million tonnes" explains Oliver Kutsch, CEO of Ceresana. About two thirds of these additional capacities are to be created in these two regions. The Middle East in particular is able to profit from substantial natural gas resources that allows for ammonia production at comparatively low costs. Exception to this tendency to geographical re-orientation of production is the USA that is likely to increase both production volume and production capacities. Utilizing the Fracking-technology, this country is able to exploit its shale gas resources at economic prices and thus becomes a competitive location for ammonia production.

Urea as growth engine

This worldwide most comprehensive report depicts the development in both the agricultural as well as the industrial sectors. Plants need nitrogen as primary nutrient and ammonia, often in processed form, is an efficient fertilizer. Thus, the agricultural sector consumes a by far larger share of ammonia (80%) as does the industry. Urea made from ammonia is processed in both application areas. The industry utilizes ammonia for the manufacturing of urea-formaldehyde resins, melamine, and the urea solution AdBlue that is designed to reduce nitrogen consumption.

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