Europe Ammonium Nitrate Market

Europe Ammonium Nitrate Market Analysis

The Europe Ammonium Nitrate Market is expected to register a CAGR of greater than 1.03% during the forecast period.

The COVID-19 pandemic affected several industries negatively. The lockdown in most European countries caused disruptions in production, and restrictions on freight transportation disturbed the supply chain. However, the conditions started recovering in 2021, restoring the market's growth trajectory.

• Over the short term, rising demand from the agriculture industry and increasing construction and infrastructure activities are the major factors driving the growth of the market studied.
• However, the availability of substitutes such as potassium nitrate, ammonium sulfate, and urea is likely to restrain the growth of the studied market.
• Nevertheless, the development of green ammonia for fertilizer production is likely to create lucrative growth opportunities for the European market, as green ammonia can be used as a source to produce ammonium nitrate.
• Russia represents the largest market over the forecast period due to the increasing consumption from the agricultural sector.

Europe Ammonium Nitrate Market Trends

Agricultural Sector to Dominate the Market

• Ammonium nitrate is widely used as fertilizer in the agricultural sector. It has been a common nitrogen (N) source because it contains both nitrate and ammonium, and it has a relatively high nutrient content.
• Many vegetable growers prefer an immediately available nitrate source of plant nutrition and use ammonium nitrate.
• Italy is one of the biggest players in the global fruit and vegetable market. The export of fruits and vegetables in Italy totaled USD 5.9 billion in 2022. Each year, the fruit and vegetable sector, between fresh and processed, guarantees Italy a turnover of EUR 15 billion (~USD 16.09 billion), accounting for 25% of total agri-food production.
• Additionally, with more than one million hectares under cultivation, Italy boasts as many as 119 protected designation of origin (PDO) and protected geographical indication (PGI) fruit and vegetable products and excels in Europe with many important productions such as apples, pears, cherries, table grapes, kiwis, hazelnuts, chestnuts in addition to many vegetables such as tomatoes, eggplants, artichokes, fresh chicory, endives, celery, and fennel.
• In 2022, ammonium nitrate was the most popular fertilizer among Russian farmers, accounting for up to 60% of the consumption of nitrogen fertilizers and up to 25-30% of all fertilizers.
• Russia represents around two-thirds of the world's ammonium nitrate production, most of which is used in fertilizers to improve yields for crops such as corn, cotton, and wheat.
• According to the United States Department of Agriculture, in the local marketing year 2022-23, corn production volume was expected to be approximately 15 million metric tons in Russia.
• Furthermore, according to USDA Foreign Agricultural Service, Russia was forecasted to produce 68 million metric tons of winter wheat in the crop year 2022-23, an increase of approximately 16 million metric tons from the previous crop year.
• Therefore, ammonium nitrate use as a fertilizer for enhanced crop production is likely to impact the market in the forecasted period.

Russia to Dominate the European Region

• Russia is expected to dominate the market for ammonium nitrate consumption during the forecast period, mainly due to the increase in agricultural activity.
• As per 2022 statistics, in Russia, approximately 45% of the ammonium nitrate is consumed by the agriculture sector, about 15% is consumed by the industrial sector, and the remaining 40% is exported.
• The largest producers of ammonium nitrate in Russia are Uralchem, Akron, and Eurochem, which cumulatively hold a capacity of about 7 million tons per year.
• The Ministry of Industry and Trade previously reported that in 2022, Russian companies planned to produce at least 11 million tons of ammonium nitrate, of which 5.2 million tons were planned for use in agricultural needs, 2 million tons for industrial consumption, and the rest for export.
• In 2022, some agricultural producers in Russia, before the sowing campaign, faced a shortage of ammonium nitrate, a mineral nitrogen fertilizer used in early spring to feed winter and spring crops.
• Thus, the Ministry of Agriculture reported the need for additional volumes of ammonium nitrate in some regions compared to previously agreed ones. Therefore, a ban on the export of this fertilizer was introduced from February 2 to April 1, 2022, as a measure to provide Russian farmers with the right amount of ammonium nitrate.
• Therefore, the restriction of exports made it possible to provide domestic farmers with the necessary amount of ammonium nitrate during the period of its maximum purchases, i.e., January-March 2022, as well as prevent an increase in prices for this type of fertilizer in conditions of active demand and war state.
• According to the Russian Federal State Statistics Service, the value of agricultural production in Russia has been gradually increasing over the years. In 2022, the figure reached about RUB 8.85 trillion (~USD 0.12 trillion), up around 15% from the previous year.
• In 2023, the government of Russia lifted the ban and increased the export quota for ammonium nitrate by 300 million tonnes through May 31, 2023. The quota on ammonium nitrate exports was originally 225 million tonnes from January 1-March 31 and 828.5 million tonnes from April 1-May 31. It was raised by 365 million tonnes at the end of January 2023.
• Hence, all such trends are expected to drive the demand for ammonium nitrate market in Russia during the forecast period.

Europe Ammonium Nitrate Industry Overview

The European ammonium nitrate market is consolidated in nature. The major players (not in any particular order) include YARA, Orica Limited, EuroChem Group, URALCHEM JSC, and ENAEX.

Europe Ammonium Nitrate Market Leaders

Europe Ammonium Nitrate Market News

May 2023: OSTCHEM increased fertilizer production by almost 40% in the first quarter of 2023. The company's nitrogen-holding plants produced 515.5 thousand tons of mineral fertilizers in the first quarter of 2023, up 36.2% year-on-year. The key products produced by Ostchem plants were ammonium nitrate and other fertilizers. The company's production of ammonium nitrate increased by 17% during the first quarter of 2023.

Feb 2022: EuroChem announced to acquire nitrogen business from Borealis Group. This acquisition will help EuroChem strengthen its nitrogen-based ammonium nitrate fertilizers production, thus, enhancing its product portfolio.