May 29, 2024

Outback Ammonia: Australia’s Agricultural Nitrogen Solution

Australia Ammonia Market is driven by growing demand from fertilizers industry

The Australia ammonia market primarily comprises ammonia that finds applications as a key ingredient in the production of fertilizers. Ammonia is used as a raw material in the production of nitrogen-based fertilizers such as urea, ammonium nitrate, and ammonium sulfate. It helps boost crop yields as nitrogen is one of the three primary nutrients required by plants. Rising demand for food owing to the increasing population has augmented the sales of fertilizers over the years. Additionally, the agricultural industry in Australia is a major contributor to the overall economy.

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 are Incitec Pivot Limited, Yara International ASA, Orica Limited, and Wesfarmers Chemicals, Energy & Fertilisers. Incitec Pivot Limited is one of the leading producers and distributors of fertilizers, industrial explosives, and related products in Australia.

The demand for ammonia in Australia is growing due to the rising need for nitrogen-based fertilizers from the expanding agriculture sector. Fertilizer consumption in Australia has increased over the recent years to boost crop production. This rising utilization of fertilizers will continue to drive the demand for ammonia.

Major companies are investing heavily in capacity expansions to leverage the potential of the Australian ammonia market. For instance, in 2023, Wesfarmers Chemicals, Energy & Fertilisers completed the expansion of ammonia and ammonium nitrate plants in Kwinana, Western Australia to increase production. Several players are also entering into partnerships for developing ammonia export projects to cater to the growing global demand.

Market key trends

One of the key trends in the Australia ammonia market is the increasing focus on the production of low-carbon ammonia. Producing ammonia through renewable energy sources such as solar and wind offers environmental benefits. It can also be used as an alternative to fossil fuels. To decarbonize fertilizer production and promote the hydrogen economy, leading companies are developing pilot projects to produce green ammonia in Australia. For example, Incitec Pivot is working on a project to produce ammonia using renewable hydrogen at its Phosphate Hill fertilizer plant.

Porter’s Analysis
Threat of new entrants: High capital investments and economies of scale required to operate efficiently pose entry barriers for new players.

Bargaining power of buyers: A small number of large buyers source ammonia on term contracts. Hence their bargaining power over suppliers is high.

Bargaining power of suppliers: The market is dominated by a small number of large suppliers who possess significant bargaining power over customers.

Threat of new substitutes: Substitute products are still in development phase with limited commercialization.

Competitive rivalry: Intense competition exists among existing players to gain market share through competitive pricing and innovative supply chain management.

Geographical Regions
The Australasia region currently accounts for over 40% of the total value in the Australia ammonia market, due to widespread farming activities and a well-established agricultural sector in countries like Australia and New Zealand. Ammonia consumption in these countries is concentrated in fertilizer production.

The fastest growing region over the forecast period is expected to be Southeast Asia. Countries like Indonesia, Vietnam and Thailand are agriculture-driven economies undergoing rapid industrialization which is set to boost demand for ammonia from various end-use industries including fertilizers, refrigerants and explosives manufacture. Development of new fertilizer plants and expansion of existing facilities will support the ammonia market in Southeast Asia.

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  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it