The Market Dynamics of Ammonia and its Growing Demand

Dynamics of Ammonia

This blog contains detailed information on what ammonia is, as well as its production process, market drivers, recent advancements, pricing analysis and key competitors.

Ammonia is an inorganic compound of nitrogen and hydrogen. The structural formula of ammonia is NH3. It is one of the most prevalent nitrogen-containing compounds in the atmosphere and is a colourless, alkaline gas.

Request Access For the Latest Price Trends of Ammonia

It is an irritant that is used in the commercial and industrial sectors. It has a distinctly unpleasant scent. Due to its high water solubility, it deposits in the upper airways when breathed.

The production of amino acids and nucleotides, which is essential for many biological processes, uses ammonia as a precursor. It is produced by bacteria in the soil using animal and plant waste, organic debris, and plant material as food.

Ammonia Shortage in 2022 and Outlook for 2023

The year 2022 witnessed a considerable ammonia shortage and ‘price-precipice' as a result of the Russia-Ukraine war, which led to trade embargoes that affected the import-export dynamics in Russia. Additionally, the prices of natural gas had been constantly rising for a few years, resulting in the high prices for Nitrogen-based fertilizers. This situation has caused a considerable increase in ammonia prices, particularly during winters when there is a high demand for natural gas.

Ammonia shortage in 2023, however, is anticipated to be rescinded owing to several reasons, including reduced dependence on imports and more focus on production, especially in the European region. Moreover, slouched costs of natural gas globally, will contribute to bring the ammonia prices down and will stabilize the 2022 Ammonia price hike.

Production of Ammonia

Although a significant waste product of biological synthesis, industrial-grade ammonia is important to the global ammonia industry. There are several methods used to manufacture ammonia in industrial settings, two of which are listed here.

Production of ammonia by partial oxidation of heavy oils: Coal and heavy fuel oils are used as feedstocks in this process to create ammonia. During this process, the Air Separation Unit produces only pure nitrogen and oxygen. In addition, gasification enters the picture, converting hydrocarbon and oxygen into hydrogen. The result is industrially generated pure-grade ammonia once the soot and sulphur formed are removed.

In Haber's method, nitrogen and hydrogen from natural gas combine to produce ammonia, which is then used as a fertiliser. To create hydrogen, the sulphur in the process is first desulfurized (from natural gas). The production of methane in a primary reformer, where it will react with hydrogen, is another process. After cooling, the gas is combined with nitrogen to produce ammonia.

Market Drivers of Ammonia

Every year, ammonia is produced, and its market value is estimated to be around USD 60 billion. It mostly serves as fertiliser. The industry's expansion is fueled by the continuous demand for product from the agriculture sector. The government is working harder to create chemically treated fertilisers, giving the major ammonia sector players more options.

Read More About Ammonia Production Cost Reports - Get Free Sample Copy in PDF

The market is gaining from the agricultural growth that is required by the quickening rate of population growth and the rise in food consumption. Many studies have focused on the usage of ammonia and fuel conversion. The prospect of employing it as a pure, eco-friendly liquid fuel is assisting the ammonia market's growth. Numerous diverse businesses, including those in mining, medicine, and textiles, have an impact on how ammonia is used.

Recent Developments in Ammonia

  • August 04, 2022: KBR and McDermott International, two titans of engineering and construction, reached a deal on a licencing basis to offer integrated solutions for KBR's proprietary ammonia technologies. The deal, which combines KBR's cutting-edge technology with McDermott's expertise in worldwide execution, vision, and modularization, will be a response to the expanding ammonia market.
  • August 04, 2022: By recognising "blue" hydrogen and ammonia production, SABIC (Agri-Nutrients Corporation), in collaboration with Arameo, obtained the top independent recognition in the world. The honour was given by the renowned independent testing, inspection, and certification organisation TUV Rheinland, which was founded in Germany. It was provided to SABIC AN in Jubail and to Aramco's fully-owned refinery (SASREF), which is also in Jubail, together with 37,800 tonnes of "blue" ammonia and 8,075 tonnes of "blue" hydrogen.

Ammonia Price: Forecast and Trend


Recently, ammonia prices decreased as a result of the quarter's lower upstream ammonia production cost. Early in the year, coal prices and production reached their peak before stabilising. The market experienced a stockpile of goods as a result of the rise in operational costs brought on by the decline in feedstock prices.


The price of ammonia was on the rise in the European region as a result of the surging price of crude oil in recent months. Due to the ban on Russian oil supplies, Europe experienced high rates of inflation.

North America

Ammonia prices dropped in the domestic US market recently as a result of a decline in demand from downstream industries. Due to buyers' conservative spending habits in the face of rising interest rates and a deteriorating economy, supply and prices remained low despite falling feedstock and operating costs.

Key Market Players for Ammonia

  • Yara International
  • Qatar Fertiliser Company
  • Nutrien Ltd.
  • Jordan Phosphate Mines Company Limited
  • Eurochem Group AG
  • Yidu Xingfa Chemical Co. Ltd.
  • Yunnan Yuntianhua International Chemical Co. Ltd
  • Chemische Fabrik Budenheim KG
  • Innophos, Inc.
  • Maaden-Saudi Arabian Mining Company

About Author:

Prakhar Panchbhaiya

Senior Content Writer at Procurement Resource

Prakhar Panchbhaiya is an accomplished content writer and market research analyst. With over 4 years of experience in content creation and market analysis encompassing many industries, including pharmaceuticals, nutraceuticals, biochemistry, healthcare, ed-tech, and Food & Agriculture, he has been creating quality content for multiple sectors. He is a Biochemistry major with sturdy backing in a PG diploma in digital marketing, helping in the exhaustive content creation based on extensive research and competitive marketing.




Get latest News About Procurement Resource
Subscribe for news

This site uses cookies (including third-party cookies) to record user’s preferences. See our Privacy PolicyFor more.