Australia Ammonia Market is Estimated to Witness High Growth Owing to Rising Application In Fertilizers Production
The Australia ammonia market is primarily driven by high demand from the agricultural sector. Ammonia is a key raw material used in the production of various nitrogenous fertilizers such as urea, ammonium nitrate, and ammonium sulfate. Fertilizers play a crucial role in boosting agricultural yield and productivity in Australia. Growing population and changing dietary patterns are increasing the demand for food production, which is augmenting the consumption of fertilizers and subsequently ammonia in the country.
The Global Australia ammonia market is estimated to be valued at US$ 934.85 Million in 2024 and is expected to exhibit a CAGR of 6.4% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the Australia ammonia market are Incitec Pivot Limited, Yara International ASA, Orica Limited, and Wesfarmers Chemicals, Energy & Fertilisers. These players are focusing on expanding their production capacities to cater to the growing demand from end-use industries.
The key opportunities in the Australia ammonia market include the increasing export of ammonia to other countries due to growing supply-demand gap and rising agricultural exports from Australia.
Technological advancements such as membrane technologies for production of ammonia from renewable power and air are likely to boost the market growth over the coming years.
Market drivers
The rising agricultural production in Australia due to favorable climatic conditions and government support is a major market driver. Australia is one of the leading agricultural exporters globally. Ammonia plays a vital role in achieving higher crop yields through balanced fertilization. This is anticipated to propel the demand for ammonia over the forecast period.
Current challenges in Australian Ammonia Market:
The Australian ammonia market is facing multiple challenges which hinder its growth prospects. Rising energy and feedstock prices have significantly increased the production cost of ammonia in the country. Australia is heavily dependent on imports for its natural gas requirements which is a key feedstock used in ammonia production. Volatility in international gas prices poses a major risk. Strikes by workers and labor issues also impact the operations of major ammonia producers at times. aging infrastructure and plants require huge capital investments for upgrades and maintenance to operate efficiently.
SWOT Analysis
Strength: Australia has ample natural resources and developed infrastructure to support large scale ammonia production. Presence of major fertilizer producers with technical expertise and economies of scale.
Weakness: High input and energy costs reduce the competitive edge of domestic ammonia plants. Logistical challenges in remote locations hamper overall efficiency.
Opportunity: Rising demand for ammonia as fertilizer and clean energy can significantly boost local production and exports. Countries are looking to diversify supply chains and reduce dependence on key markets.
Threats: Stiff competition from export hubs like Trinidad and Middle East with access to much cheaper gas feedstock. Rising emission regulations can affect some plants requiring transition to greener fuels and technologies.
In terms of value, the state of Queensland in eastern Australia accounts for the largest share in the domestic ammonia market currently. The region is home to two large-scale ammonia plants operated by major producers and have access to ports for exports. Another major concentration is seen in the state of Western Australia driven by ammonia demand from its mining and resource industries.
The fastest growing region for the Australian ammonia market in the forecast period is expected to be New South Wales. Ammonia capacities are being expanded and new projects planned to cater to fertilizer demand from intensive agricultural industries in the state. Investments are also underway to produce ‘green ammonia’ using renewable electricity as part of the state’s decarbonization goals.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
