Ammonia is the basic building block of the world nitrogen industry and is the intermediate product from which a wide variety of nitrogen-based fertilizers and industrial products are produced. Fertilizer use accounts for around 85% of ammonia demand.
Ammonia is generally processed into a variety of fertilizer products before being applied to the soil. These products include urea, ammonium nitrates, ammonium sulphate and ammonium phosphates. Urea plants are integrated with ammonia production as they require the carbon dioxide by-product from ammonia units.
If ammonia is applied directly to the soil, it will be converted to ammonium and nitrate before plants can use it as a source of nitrogen. Urea also needs to be transformed into ammonium and nitrate. Nitrates, on the other hand, are readily absorbed by plants with minimum loss.
There is a considerable difference in the product mix for different regions of the world. Urea, the fastest growing nitrogen product, is particularly popular in warmer climates. Urea ammonium nitrate (UAN) is mainly used in North America and Europe while nitrates are mainly applied in Europe. In the US, the direct application of ammonia to the soil accounts for up to 25% of the nitrogen fertilizer market.
In China, urea is the most popular fertilizer. China is also the only country to use ammonium bicarbonate to any degree.
The growth in biofuels is having an impact on nitrogen fertilizer demand. The International Grains Council estimates that global consumption of maize (corn) for industrial use will reach 200m tonnes by 2009/10, an increase of 6% on 2008/09. Total feed use of maize is unchanged at 470m tonnes. Mandated ethanol production in the US will increase by 14% in 2010, resulting in a 9m tonnes rise in maize demand in this sector to 104m tonnes.
Ammonia also has a number of industrial end uses. Ammonium nitrate is used to make explosives while the medical grade is decomposed to nitrous oxide (laughing gas). Ammonium bicarbonate has applications in baking powder formulations, in fire extinguishers and as a blowing agent in the manufacture of polymers.
Ammonia is used in the production of hexamethylene diamine (HMDA) for nylon, acrylonitrile for fibres and plastics, caprolactam for nylon, isocyanates for polyurethanes, and hydrazine. It is used as a catalyst in phenol-formaldehyde condensation and in urea-formaldehyde condensation to make synthetic resins.
Ammonia is making a come-back as a refrigerant because it does not contribute to ozone depletion and global warming when released to the atmosphere. It is said to be an efficient refrigerant in food processing and preservation as well as other refrigeration and air conditioning processes.
Other uses for ammonia include as a cleaning and bleaching agent, and as a household cleaner. It is also used as a preharvest cotton defoliant and in metal treating operations.
Ammonia markets lengthen
The world nitrogen market in 2008 shifted from a tight balance into a growing surplus as demand deteriorated and imports dwindled. According to preliminary surveys from the International Fertilizer Industry Association (IFA), world ammonia production in 2008 was 153m tonnes NH3, a decline of 1% over 2007. Global ammonia trade fell 2.4% to an estimated 18.7m tonnes NH3.
Global ammonia capacity was 181m tonne/year NH3 in 2008, expanding by a net 5.0m tonne/year over 2007 with the main additions occurring in China, Africa and the Middle East. The IFA noted that many projects that were slated for commissioning in 2008 have been delayed by six months or more.
According to the IFA 2009 world capacity survey, global ammonia capacity will increase by 20% to 218m tonne/year NH3 by 2013. The bulk of the growth will be in China, Middle East, Latin America and Africa. IFA estimated global seaborne ammonia export availability will be close to 20.6m tonnes in 2013, a net increase of 3m tonnes over 2008.
In terms of nitrogen supply, world capacity will reach 179m tonne N in 2013. IFA estimated global nitrogen supply capability (or effective capacity) to grow from 134m tonnes N in 2009 to 155m tonnes N in 2013.
For the period 2008 to 2013, consumption of nitrogen nutrient fertilizer is projected by the IFA to grow at 2.2%/year to 110m tonnes N in 2013, compared to 99.3m tonnes N in 2008. Nitrogen demand in the non-fertilizer sector is forecast to grow even faster at 5.5%/year from 21.8m tonnes N in 2008 to 27.9m tonnes N in 2013. Taking into account distribution losses, IFA estimated global nitrogen demand will reach 142m tonnes N in 2013, a growth rate of 3.2%/year.
China market weak
Demand for nitrogen fertilizers in China was weak in 2008 with ammonia production falling 1% compared to 2007 to 48.9m tonnes NH3. Much of the decrease was related to lower ammonium bicarbonate production. In the medium term, China’s ammonia capacity is projected by the IFA to increase from 59m tonne/year NH3 in 2008 to 70.5m tonne/year in 2013.
India is ranked as the world’s third largest producer of ammonia and the second largest importer. Imports which are estimated at 1.5m tonnes in 2008 are used for phosphate fertilizers since domestic ammonia production is mostly integrated with urea production. Excluding any plant restarts, IFA expected India’s ammonia capacity to reach 15.9m tonne/year in 2013, a 15% increase over 2008.
In the Middle East, new merchant ammonia capacity is expected in Iran, Qatar and Saudi Arabia. The IFA estimated the potential for seaborne ammonia exports to grow from 2.6m tonnes in 2008 to 4.5m tonnes in 2013.
Trinidad is the world’s largest ammonia exporter with a capability close to 4.8m tonnes. Other Caribbean and Latin American exporters include Venezuela, Mexico, Argentina, Brazil and Colombia.
Imports into the US, the world’s largest importer, declined by 10% in 2008, estimated the IFA. Imports come mainly from Trinidad and to some extent from Russia, Ukraine, Venezuela and the Middle East.
West European production is expected to fall to 8.9m tonnes N in 2008, compared to 9.2m tonnes N in 2007, according to the global consultant Nexant. Meanwhile output in Central and Eastern Europe (CEE) will rise by 300,000 tonnes N in 2008 to 21.3m tonnes N. West European demand is projected to dip by 100,000 tonnes in 2008 to 10.9m tonnes and demand will rise by 400,000 tonnes to 18.4m tonnes in CEE, according to Nexant.
Demand growth in Western Europe will remain under 1%/year, says Nexant, while CEE markets will grow at 2-3%/year. Western Europe's net import need, estimated at 1.9m tonnes N in 2008, will grow as high gas costs force closures and reductions of expensive capacity. The region will be mainly supplied from Eastern Europe and North Africa.
(Updated: June 2009. Sources: ICB Chemical Profile, 27 October 2008; IFA Annual Conference, Shanghai, May 2009)