AMMONIUM NITRATE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The ammonium nitrate market size was valued at US$ 18.38 Bn in 2023 and is expected to reach US$ 25.86 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.4% from 2024 to 2031.

Ammonium nitrate is a chemical compound made by combining ammonia and nitric acid. It is a white crystalline solid and is highly soluble in water. Ammonium nitrate is predominantly used in agriculture as a high-nitrogen fertilizer. It is also used to make commercial explosives for mining and construction activities. The key drivers of the ammonium nitrate market include the rising demand for fertilizers to boost agricultural productivity, growing mining activities, and increasing infrastructure investment.

The ammonium nitrate market is segmented based on application, end-use industry, and grade. By application, the market is segmented into mining, quarrying, civil construction, and others. The mining segment accounted for the largest share of the market in 2023. The growth in this segment is driven by the rising use of ammonium nitrate-based explosives in metal and coal mining activities.

Ammonium Nitrate Market Regional Insights

• North America is expected to be the largest market for ammonium nitrate during the forecast period, accounting for over 20.3% of the market share in 2023. The growth of the market in North America is attributed to the high demand for ammonium nitrate fertilizers and explosives from the mining sector.
• Asia Pacific is expected to be the second-largest market for ammonium nitrate, accounting for over 45.6% of the market share in 2023. The growth of the market is attributed to the rapidly growing mining and infrastructure sectors in emerging economies such as China and India.
• The Middle East & Africa is expected to be the fastest-growing market for ammonium nitrate, growing at a CAGR of over 16.5% during the forecast period. The growth of the market in Middle East & Africa is attributed to the expanding mining industry and increasing investments in the construction sector in the region.

Figure 1. Global Ammonium Nitrate Market Share (%), by Region, 2023

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Ammonium Nitrate Market Drivers

• Increasing Mining Activities: The growth in mining activities across the globe is a major driver for the ammonium nitrate market. With the rising demand for metals and minerals, mining companies are expanding existing projects and initiating new mining projects. This is resulting in greater demand for explosives which utilize ammonium nitrate. The need for more efficient and controlled blasting is driving the adoption of bulk emulsions and pumped emulsions made from ammonium nitrate. For instance, according to data from the World Bank, the estimated value of world mineral production increased from U.S $878 Bn in 2011 to U.S $1.1 trillion in 2019.
• Rising Infrastructure Investment: The rising investments in infrastructure projects, such as roads, railways, airports, dams, etc., is fueling the demand for ammonium nitrate explosives. With several governments announcing stimulus packages for infrastructure development post the COVID-19 pandemic, the construction sector is poised for strong growth. The infrastructure boom globally will drive the demand for controlled blasting agents including ammonium nitrate for rock excavation and demolition activities. For instance, according to World Bank data from 2021, total infrastructure investment as a percentage of GDP was 4.5% in India in 2020, which is projected to increase to 5.4% by 2023.
• Expanding Defense Sector: The defense and military sectors across the world utilize ammonium nitrate extensively in the manufacturing of ammunition and explosives. With several countries increasing their defense budgets and spending, it is generating substantial demand for ammonium nitrate from the defense sector. The rise in defense procurement budgets will result in greater adoption of ammonium nitrate. For instance, according to data published by the Stockholm International Peace Research Institute (SIPRI), the world military expenditure rose to nearly U.S $2 trillion in 2020, despite the global pandemic
• Increasing Fertilizer Requirement: Ammonium nitrate is one of the most widely used fertilizers globally owing to its high nitrogen content. With the growing need to improve agricultural yields to feed the rising global population, the demand for nitrogenous fertilizers is increasing. The need for higher crop yields is expected to drive fertilizer consumption, thereby fueling the demand for ammonium nitrate. For instance, India which aims to achieve self-sufficiency in food grains, use of ammonium nitrate has helped scale up wheat and rice yields over the last decade as per data published in Fertilizer Statistics by Department of Agriculture and Farmers Welfare, Government of India.

Ammonium Nitrate Market Opportunities

• Production Technology Innovations: Companies in the ammonium nitrate market have significant opportunities from investing in new production technologies and methods. Several new techniques are being used to produce ammonium nitrate in an eco-friendly manner with reduced environmental impact. For instance, manufacturers are adopting processes to recover nitric acid and reduce greenhouse gas emissions. Adoption of membrane separation technologies can enhance production efficiency. Investments in such innovative manufacturing solutions can help producers improve profitability and gain a competitive edge.
• Developing Safer Grades: With growing safety concerns related to storage and transportation of traditional higher density ammonium nitrate, producers have the opportunity to develop safer low density and non-detonable grades. These include calcium ammonium nitrate, ammonium sulfate nitrate, and urea-ammonium nitrate solutions. Manufacturers can also explore introducing ammonium nitrate products with specialized coatings and additives to prevent caking, dusting and detonation. Investment in R&D to create safer grades can help firms tap into new application areas. For instance,

the European Union's Joint Research Centre published a report in 2022 analyzing effectiveness of different additive combinations to lower sensitization in controlled experiments.

• Emerging Applications: New application areas are emerging for ammonium nitrate owing to its versatile chemical properties. For instance, in the pharmaceutical sector, ammonium nitrate is being used as an oxidizing agent in certain drugs and to produce specialty antibiotics. The wastewater treatment industry is witnessing growing use of ammonium nitrate for removal of metals through ion exchange. There is also increasing application as a chemical sensitizer in emulsions and gels used in specialized blasting systems. Identifying and targeting such new application segments can help drive product adoption.
• Geographical Expansion: Developing markets in Asia, Latin America, and Africa offer significant opportunities for manufacturers to expand their geographical footprint and distribution network. These regions are witnessing increased activity in mining, infrastructure development and fertilizer consumption, which can generate substantial demand for ammonium nitrate. Moreover, these markets have relatively low regulatory barriers which can make market entry easier for international firms. Establishing production facilities and partnerships in high potential markets can drive the growth for ammonium nitrate companies.

Ammonium Nitrate Market Trends

• Development of Customized Grades: A notable trend is the development of tailored and customized grades of ammonium nitrate to meet the specific requirements of different end-use applications. For instance, porous ammonium nitrate prills are gaining popularity in mining explosives as they absorb oil better and improve blasting properties. Manufacturers are also developing low-density ammonium nitrate products for quarrying and construction needs. The availability of application-specific grades allows end-users to optimize performance and total costs.
• Adoption of Automated Production Processes: Ammonium nitrate producers are increasing the use of automation technologies, such as PLCs, SCADA, and robotics, to improve reliability, efficiency, and output in manufacturing plants. Automation allows the remote monitoring and control of variables like temperature and pressure at different stages. It also minimizes risks associated with manual handling of ammonium nitrate. Advanced sensors are being deployed to track product quality in real-time. These technologies enable cost-effective and flexible mass production.
• Mergers and Acquisitions: The ammonium nitrate market has witnessed a rise in mergers and acquisitions as large producers seek to increase market share, expand into new geographies, and enhance production capabilities. Recent examples include Orica's acquisition of Bhagiradha Chemicals and Industries and Dyno Nobel's takeover of Austin Powder's Peru business. Small and mid-sized companies are also attractive acquisition targets for expanding regional presence. The trend of consolidation is expected to continue as firms aim for greater vertical integration. For instance, in 2022 Norway-based. company, Yara International acquired the fertilizer assets of Brazil’s Vale, a key deal that expanded Yara's production capacity and distribution infrastructure in South America.
• Inventory Management Enhancement: Ammonium nitrate producers are adopting digital initiatives and software tools to improve inventory management, which ensures optimal production planning and raw material ordering. Technology is enabling accurate tracking of stock levels across the supply chain. Data analytics also provides insights into demand forecasting and allows dynamic alignment of production with customer requirements. Enhanced inventory control minimizes losses due to inadequate or excess stock. Overall, data-driven inventory management boosts efficiency. For instance, CF Industries, one of the largest producers of ammonium nitrate in the U.S., invested over U.S $150 million between 2015 and 2020 on advanced warehouse management systems equipped with sensors, GPS devices to get live updates on the movement of AN stocks stocked at their various distribution centers across the Midwest region.

Ammonium Nitrate Market Restraints

• Stringent Regulatory Policies: Stringent regulations pertaining to the production, storage, transport and use of ammonium nitrate are a major restraint for the market. Considering the explosive hazards, many governments have enforced strict policies regarding licensing, security clearance, on-site storage limits, packaging and tracking measures for ammonium nitrate transfer. These regulations raise production costs and constrain demand growth. Lack of harmonization in policies across regions is also an impediment for the ammonium nitrate industry. For instance, according to new rules introduced by Dangerous Goods Safety Advisor in Australia in 2022, ammonium nitrate can only be imported through designated ports and thorough background checks are required for all parties involved in the supply chain.

Counter balance: Ensure strict adherence to regulations governing the production, storage, and transportation of ammonium nitrate to avoid legal and reputational risk.

   - Lobby for industry-friendly regulations by actively participating in discussions with regulatory bodies

• Volatility in Raw Material Prices: Ammonium nitrate production relies on key raw materials including ammonia and nitric acid, which experience price volatility due to fluctuations in energy and distribution costs. Natural gas is the major input for manufacturing ammonia. High natural gas prices directly influence ammonia and ammonium nitrate pricing, thereby affecting producer margins. Unless long-term supply contracts are in place, raw material price swings can negatively impact the ammonium nitrate industry. For instance, according to the U.S. Energy Information Administration, the price of natural gas in Europe surged from an average of U.S $4.8 per million British thermal units in 2020 to over $30 per mmbtu in late 2022 due to supply disruptions arising from the Russia-Ukraine conflict.

Counter balance: Explore alternative applications where ammonium nitrate can be utilized, potentially developing new markets

• Competition from Ammonium Sulfate: Ammonium sulfate is emerging as a major substitute for ammonium nitrate fertilizers owing to its higher sulfur content and more targeted nutrient release. Many farmers are adopting ammonium sulfate over ammonium nitrate to improve productivity and yield for crops with high sulfur requirements. Additionally, the lower risk of detonation makes ammonium sulfate safer to use. The growing shift towards ammonium sulfate in agriculture is a key factor restricting market growth for ammonium nitrate. For instance, data from Fertilizer Canada shows that domestic ammonium nitrate production in the country reduced by over 15% between 2020 and 2022 due to the closure of some manufacturing facilities.

 Analyst’s Views

The ammonium nitrate market is expected to see steady growth over the coming years As the world's population increases, more ammonium nitrate will be required to boost crop yields through its use as a nitrogen-rich fertilizer. The construction industry is another major end-use segment and infrastructure development projects globally will spur materials’ demand.

However, the market growth could be hampered by stricter regulations surrounding the storage and transport of ammonium nitrate due to its hazardous nature. Environmental concerns may also arise from nitrogen-runoffs caused by over-fertilization with the chemical. Substitutes, such as urea and calcium ammonium nitrate, also pose competition.

From a regional perspective, Asia Pacific is projected to remain the dominant consumer of ammonium nitrate owing to its large agricultural and construction bases. Within the region, India and China are anticipated to account for major shares. North America and Western Europe will also see steady uptake for fertilizer and explosives usage. The Latin American region offers promising opportunity as well, especially in agricultural heavyweights like Brazil.

In summary, while downside risks related to regulations and substitutes exist, stable demand from key end-use industries should ensure that the ammonium nitrate market grows at a steady but consistent pace over the coming years.

Recent Developments

New product launches

• In October 2022, Austin Powder launched its new Extra Low Density Ammonium Nitrate (ELDN) solutions for safer and more efficient blasting in mining. The ultra-low density enhance blast performance in challenging geological conditions. Austin Powder is a global leader in the manufacturing of industrial explosives and accessories, as well as providing technical and blasting services.

Its mission is to improve the world through the safe and responsible use of explosives. With a history of 190 years in the business, Austin Powder has developed a wide variety of explosive products and initiation systems for industrial blasting operations.

• In May 2021, Yara International launched YaraTera Kristalon Start for potatoes, a new generation nitrate-based fertilizer that delivers nutrients to crops quickly and efficiently. It improves nutrient use efficiency. Yara International ASA is a Norway-based.chemical company that specializes in the production, distribution, and sale of nitrogen-based mineral fertilizers and related industrial products. The company also offers phosphate and potash-based mineral fertilizers, as well as complex and specialty mineral fertilizer products. Yara International is committed to responsibly feeding the world and protecting the planet, and it aims to achieve a nature-positive food future through regenerative farming and sustainable practices. The company has a strong focus on diversity and inclusion, as well as reducing its greenhouse gas intensity. Yara International is dedicated to combining prosperity with purpose and is actively seeking ambitious individuals who are passionate about making a difference
• In March 2020, URALCHEM launched new inhibited ammonium nitrate products under the FAN trademark in Russia. The corrosion inhibitors in FAN products prevent equipment damage during transportation and use. Uralchem Group is a Russia-based company that specializes in the manufacturing of a wide range of chemical products including mineral fertilizers and ammonium nitrate. It is the largest producer of ammonium nitrate and the second largest producer of ammonia and nitrogen. The company has a global presence, supplying its products to CIS countries, Eastern Europe, Asia pacific , Africa, and Latin America. uralchem was founded in 2007. The company has been annually included in the top 200 largest private companies in Russia since 2010. uralchem is known for its expansion and strategic partnerships, such as its plans to acquire a minimum 50 percent stake in Chemplex, the state phosphorus fertilizer producer, and its cooperation with Zambia and Angola to build a urea plant.

Acquisition and partnerships

• In September 2022, Dyno Nobel completed the acquisition of Austin Powder's Peru business to expand its explosives market share in Peru and Latin America

Dyno Nobel is a manufacturer of explosives and a wholly owned subsidiary of Incitec Pivot Limited. The company operates globally, with a presence in Australia, Canada, the United States, Africa, Indonesia, Mexico, South America, Papua New Guinea, and Turkey. Dyno Nobel is known for its commercial explosives and offers products such as the Ranger Electronic Initiation System and the Differential Energy™ blasting system. The company is committed to optimizing blasting processes and prioritizes safety as a core value.

Austin Powder is a company that is dedicated to the safe and responsible use of explosives.

They are known for their expertise in industrial explosives, initiation systems for blasting operations, and the implementation of the latest technologies for blasting works. Safety is a top priority for Austin Powder, and they provide technical and blasting services globally.

• In January 2022, Vijay Gas Industry entered into a strategic partnership with SmartChem Technologies to set up ammonium nitrate production plants across India

Vijay Gas Industry is a leading manufacturer and exporter of ammonia, nitric acid, and hydrochloric acid. The company is based in Mumbai, India. They offer a range of chemical products and manufacturing services, catering to various industries and applications.

 Smartchem Technologies Limited (STL) is a subsidiary of Deepak Fertilisers and Petrochemicals Corporation Limited, a publicly listed Indian conglomerate. STL is a leading manufacturer of NPK and specialty fertilizers in India, offering a wide range of high-quality NPK, specialty, and water-soluble fertilizers under its flagship brand Mahadhan. The company also produces technical ammonium nitrate and is involved in mining services and consulting

• In June 2021, Orica acquired a 60% stake in Bhagiradha Chemicals & Industries Limited to enter the ammonium nitrate market in India.

Orica Limited is an Australian-based multinational corporation and one of the world's largest providers of commercial explosives and blasting systems to the mining, quarrying, oil and gas, and construction markets. The company also offers digital solutions and services related to mining and construction .

Bhagiradha Chemicals & Industries Limited is an Indian-based company that specializes in the manufacturing of agrochemical products, including insecticides and herbicides

Figure 2. Global Ammonium Nitrate Market Share (%), by Application, 2023

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Top Companies in the Ammonium Nitrate Market

• Orica
• Enaex
• Austin Powder Company
• Incitec Pivot
• CSBP
• Yara International
• San Corporation
• Fertiberia
• Neochim
• URALCHEM Holding
• Dyno Nobel
• Vijay Gas Industry
• Solar Industries
• Maxam
• AEL Mining Services
• EPC Groupe
• Gulf Oil Corporation
• IDEAL Industrial Explosives
• Sichuan Meifeng Chemical Industry
• Jiaocheng Jinxin Chemical

Definition: The ammonium nitrate market refers to the industry and trading for ammonium nitrate, which is a chemical compound made by combining ammonia and nitric acid. It appears as a white crystalline solid and is highly soluble in water. Ammonium nitrate has major applications as a fertilizer in agriculture and as an explosive for mining and construction. The key factors driving the growth of the global ammonium nitrate market include the rising demand for fertilizers, increasing mining and infrastructure activities, and growing adoption in the defense and pharmaceutical sectors. Leading manufacturers are focused on developing safer handling and application techniques for ammonium nitrate owing to the associated hazards.

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