Definition of Market/Industry:
Ammonia is a naturally occurring colorless gas that has one nitrogen and hydrogen group. It is the most common nitrogenous waste especially among aquatic organisms and is also used as a key intermediate for the synthesis of the numerous pharmaceutical products. Moreover, it is used in the manufacturing of fertilizer as it is the basic building block of ammonium nitrate fertilizer, which releases nitrogen in the soil for the healthy growth of the plants in the farm and also improves soil fertility. Furthermore, ammonia is also used as refrigerant gas and in air-conditioning equipment since it can absorb a substantial amount of heat from the surrounding.
In 2018, Australia ammonia market was valued at US$ 776.1 million, in terms of revenue and 1,581.5 kilo tons in terms of volume.
Rising demand for ammonia as an industrial and explosive product is expected to fuel the market growth of the ammonia. Ammonia plays a crucial role in the manufacturing of nitric acid that is used as a precursor for the production of chemical compounds such as ammonium nitrate, calcium ammonium nitrate, adipic acid, and other industrial chemicals. Moreover, the growing production of explosives around the globe is further projected to fuel the demand for nitric acid. This, in turn, is expected to propel the market growth of Australia ammonia over the forecast timeframe.
Increasing expansion of ammonia plant facility in the Australia region is expected to offer lucrative growth opportunity to the market over the forecast period. For instance, in February 2018, the government of South Australia announced a “globally-significant demonstrator project,” to be built by the hydrogen infrastructure company Hydrogen Utility (H2U). The plant will comprise a 15 MW electrolyzer system, to produce the hydrogen, and two technologies for converting the hydrogen back into electricity: a 10MW gas turbine and 5MW fuel cell. The plant will also include a small but significant ammonia plant that makes it “among the first-ever commercial facilities to manufacture distributed ammonia from intermittent renewable resources.”
The fluctuating price of natural gas is expected to hamper ammonia in Australia. Natural gas is the most important feedstock for the manufacturing of ammonia and nitrogen products and also it accounts for 80–90% of the cost of ammonia production. Therefore, the fluctuating price of natural gas directly impacts the overall manufacturing cost of ammonia and thus, puts downward pressure on the pricing of downstream products such as explosives and fertilizers. Hence, this is a major factor expected to hinder the market growth of Australia ammonia.
Based on application, industrial chemical segment dominated Australia ammonia market in 2018, accounting for 41.8% share in terms of value, followed by agrochemicals and explosives segment, respectively
Increasing production of ammonia-based fertilizers in the Australia region is projected to fuel market growth over the forecast period. For instance, in December 2017, Grain and cotton growers across New South Wales and Queensland are set to benefit as Orica launches its new fertilizer business with plans for a local manufacturing plant for urea ammonium nitrate (UAN) in Moree. Hence, increasing initiatives of the manufacture to meet the rising demand for fertilizer among farmers in the region is expected to fuel the market growth.
The rising number of acquisitions in the country is expected to fuel the market growth of ammonia over the forecast period. For instance, in august 2019, Perdaman Chemicals and Fertilisers (Perdaman) has signed a licensing and engineering contract for Haldor Topsoe A/S’s SynCOR Ammonia solution for US$ 2.75 billion ammonia/urea plant in Karratha, Western Australia. With this acquisition, the Perdaman plant will be the world’s largest single-line ammonia plant with a planned capacity of 3,500 metric tons per day.
Players active in the market are Incitec Pivot Limited, Yara International ASA, Orica Limited, and CSBP Limited (Wesfarmers Chemicals Energy & Fertilisers)
Few Recent Developments
Yara International ASA
By Product Type