Ammonia or Ammonium hydroxide is a pioneering chemical and a key component in the manufacture of a number of day to day products used by people. It is an alkaline compound made up of nitrogen and hydrogen and is highly soluble in water.

Ammonia is also an integral part of the nitrogen cycle and is formed in the soil as a result of bacterial activities such as decomposition of organic matter that includes plants, animals and their wastes. It is one of the most commonly produced industrial chemicals in the U.S.

Uses and Benefits of Ammonia

Industrial Use

Because of its ability to absorb a significant amount of heat from its surroundings, Ammonia is widely used as a refrigerant and in air-conditioning equipment. It is used as a key ingredient in the manufacturing of products like fabrics, pesticides, plastics, dyes, explosives etc.

Household Use

In the household sphere, ammonia is commonly used as a cleaning agent. It is very effective in cleaning oil stains and greases accumulated from animal fats, wine or vegetable oils.

Agricultural Use

Ammonia is one of the most crucial components of the agricultural industry. According to the Chicago Tribune, about 87 percent of ammonia produced is used as fertilizer. Fertilizers having high ammonia content maintain soil quality and keep it nutrient rich by increasing the levels of essential nutrients such as boron, zinc, and selenium.

Transport Fuel

Liquid ammonia is an excellent transport fuel. It has one third the energy density of diesel.

Market Dynamics for Ammonia

 The global ammonia market is forecast to grow at a CAGR of 5.2 percent by 2022. The fertilizer and industrial sectors would be the key segments driving the demand for ammonia and are expected to benefit the ammonia market over the forecast period. In the fertilizer sector, NPK/NP fertilizers have been contributing to a significant section of the demand. In the non-fertilizer segment, the application of ammonia as a refrigerant is primarily responsible for the demand growth and is expected to rise in the coming years.

Key Drivers for the Ammonia Market

The population rise in countries such as India and China has caused a rise in agricultural activities which has further lead to an increase in the consumption of ammonia-based fertilizers. Besides the agriculture industry, industries, like pharmaceutical, food and petroleum, paper & pulp, etc. have also added to an increasing growth rate in the ammonia demand.

Regions and Suppliers Dominating the Ammonia Market

Last year the APAC region dominated the global ammonia market. It accounted for more than 50% of global consumption. Major ammonia producers dominating the market are BASF SE, Togliattiazot, Yara, PotashCorp, CF Industries Holdings, Inc., SABIC and Agrium Inc.

On a global level, the supply & demand gap of ammonia is gradually increasing, which is resulting in its constant price fluctuations. Various factors such as oscillating energy prices, cheaper crop prices, poor economic prospects, and rising competition are some of the major challenges faced by the ammonia industry.