Ammonium nitrate is a highly stable and non-explosive fertilizer that helps provide nitrogen to crops efficiently. It is colorless and highly soluble in water. Ammonium nitrate improves the fertility of soil by releasing nitrogen that acts as a building block for proteins and chlorophyll production in plants. The demand for ammonium nitrate is largely linked to global grain production levels and population growth driving the need for higher crop yields.
The global ammonium nitrate market is estimated to be valued at US$ 21.18 Mn in 2023 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The agricultural sector provides significant growth opportunity for the ammonium nitrate market. Rising global population is putting pressure on farmers to produce higher crop yields to meet the increasing global food demand. Ammonium nitrate effectively meets the nitrogen needs of various crops and helps boost agricultural productivity. With a significant portion of the global population dependent on agriculture for livelihood, the demand for high-quality like ammonium nitrate is expected to steadily increase. Governments across countries are also supporting agricultural development through various initiatives. The focus on modern farming practices to feed more people from limited cultivable land will continue driving sales in the ammonium nitrate market during the forecast period.
Porter's Analysis
Threat of new entrants: Low to moderate. Entry barriers such as capital requirements and established contracts for supplying ammonium nitrate keep threats of new entrants at bay. However, possibility of new players with strong financial backing poses a threat.
Bargaining power of buyers: Moderate. Large buyers such as mining industry have higher bargaining power due to bulk purchasing. Small buyers have low bargaining power.
Bargaining power of suppliers: Moderate. Key raw materials suppliers viz. natural gas producers have moderate bargaining power due to availability of substitutes.
Threat of new substitutes: Low. Ammonium nitrate has established applications and no major substitutes provide equivalent performance.
Competitive rivalry: High. Presence of global players intensifies competition. Innovation and capacity expansions by key players further enhance rivalry.
SWOT Analysis
Strengths: Wide applications in mining & construction industries. Easy availability of raw materials. Established production facilities.
Weaknesses: Vulnerable to regulations. Price fluctuations of key feedstocks affect margins. Exposure to supply chain disruptions.
Opportunities: Growing explosives demand from mining industry. Potential in agricultural applications. Capacity expansions in emerging markets.
Threats: Stringent safety and transport norms. Substitution threat from alternate explosives. Volatility in raw material prices.
Key Takeaways
The global ammonium nitrate market size is expected to witness high growth. The global ammonium nitrate market is estimated to be valued at US$ 21.18 Mn in 2023 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 to 2031.
Regional analysis comprises-
asia Pacific region is the fastest growing as well as largest market for ammonium nitrate. China accounts for over 30% of global ammonium nitrate capacity aided by large scale mining operations. India is also a major market growing at over 5% annually on back of infrastructure push by the government.
Key players
related content comprises- Key players operating in the ammonium nitrate market are BASF SE, Clariant International Limited, DIC Corporation, Huntsman International LLC, Tronox, Inc, Rockwood Holdings, Inc., Lanxess AG, Atlanta AG, Ferro Corporation, and Merck. BASF and Yara are the largest ammonium nitrate producers globally.
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