The Australia ammonia market is a critical component of the country's agriculture sector, with ammonia being a key ingredient in the production of various fertilizers needed to maximize crop yields. As one of the largest exporters of agricultural commodities globally, Australia relies on efficient fertilizer production using ammonia to support the domestic food production and meet global demand. Ammonia is produced through the Haber-Bosch process involving nitrogen from air and hydrogen from natural gas, providing nitrogen compounds essential for plant nutrition. The adoption of green production technologies is helping lower carbon footprint and meet emission reduction targets.
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.
Ammonia serves as a crucial raw material for synthesizing various nitrogen fertilizers used to enrich soil nutrients and boost agricultural productivity. It helps bridge the gap between demand and domestic supply of agricultural produce.
Key Takeaway
Key players operating in the Australia ammonia market are Incitec Pivot Limited, Yara International ASA, Orica Limited, and Wesfarmers Chemicals, Energy & Fertilisers. Incitec Pivot and Wesfarmers together account for over 50% of domestic ammonia production capacity.
The growing demand for agricultural commodities from export markets is driving consumption of ammonia-based fertilizers in Australia. There is increased focus on utilizing advanced production technologies and renewable energy sources to manufacture 'green' ammonia for sustainable agriculture.
Major ammonia producers are undertaking capacity expansion and global expansion initiatives to capitalize on the growing export demand. For instance, Incitec Pivot is investing $200 million to increase ammonia production capacity by 40% at its Phosphate Hill operations to supply both domestic and overseas markets.
Market key trends
The adoption of renewable energy-powered green ammonia production methods using solar and wind energy is gaining traction. Green ammonia produced without carbon emissions can help reduce reliance on fossil fuels and achieve emission reduction commitments. Companies are conducting trials and feasibility studies for green ammonia projects with the support of government incentives and policies. This emerging trend of low-carbon ammonia production will likely shape the future outlook of the Australia ammonia industry.
Porter’s Analysis
Threat of new entrants: There are few capital requirements to enter the market as technology is mature, but established players hold large market share and economies of scale.
Bargaining power of buyers: Buyers have moderate bargaining power as there are few substitutes for ammonia in industrial processes like refrigeration and fertilizer production.
Bargaining power of suppliers: Suppliers have moderate bargaining power as raw materials for ammonia production like natural gas are available from few suppliers globally.
Threat of new substitutes: There is no close substitute for ammonia in large scale industrial applications like fertilizers currently.
Competitive rivalry: Market is dominated by few large players and competition is based on pricing, product quality and reliability of supply.
Geographically, Australia market is currently concentrated in regions of Queensland and New South Wales where large fertilizer plants and chemical industries are located. These regions account for over 60% of the domestic demand for ammonia. The fastest growing region in the forecast period is expected to be Western Australia led by expansion of mining and resource industries in the region. Mining industries use ammonia for industrial refrigeration and energy generation.
