Ammonia is perhaps the most critical man-made substance to the existence of human society. Without agricultural growth, the world’s expanding population would have faced food shortages and famines a long time ago.
The expansion of population to a large extent is based on fertiliser driven agriculture and thus, indirectly on ammonia.
The discovery of ammonia synthesis by Fritz Haber and subsequent commercialisation by Carl Bosch in 1910 freed the human race of the need to worry about a source of nitrogen fertiliser for a long time.
Ammonia, either directly or indirectly, is also a building block for the synthesis of many pharmaceuticals. It is one of the most abundantly produced inorganic chemicals.
Spanning a century, the Haber process is the most popular method of ammonia production, in this process nitrogen and hydrogen are reacted together under high pressure and temperature.
Hydrogen is produced by the steam reforming of hydrocarbons, with natural gas as a feedstock. It can also be produced by the partial oxidation of naphtha or residual oil using air or oxygen and from coal gasification. Nitrogen can be obtained by the liquefaction of air or from producer gas.
Ammonia is the raw material from which various nitrogenous fertilisers – used in agriculture – are made. Ammonia itself can be applied directly to the soil as a fertiliser, but its use in this way has rapidly declined in favour of solid and liquid applications.
The production of fertilisers, including urea, ammonium nitrate, phosphate and sulfate, amongst others, consumes about 82% of all ammonia produced worldwide.
Ammonia is also used in the production of intermediately compounds for nylon, fibres, plastics and explosives. It is employed as a catalyst in phenol-formaldehyde condensation and in urea-formaldehyde condensation to make synthetic resin.
Other important applications include as a refrigerant, bleaching agent and household cleaner. It is also used in metal treating operations.
Dissociated ammonia is used as a convenient source of hydrogen for the hydrogenation of fats and oils, and the oil industry employs anhydrous ammonia to neutralise the acid constituents of crude oil and to protect equipment from corrosion.
Ammonia also has a wide range of non-fertiliser uses in industry for fibres, pulp & paper, pharmaceuticals, mining, explosives and specialty chemicals.
Ammonia is explosive and needs to be refrigerated at -33ºC if it is to be stored and transported safely.
LNG vessels are used for its transportation and costs are usually higher when compared to other fertilisers.
Logistics is a critical factor in the domestic/international trade of ammonia, as availability and costs associated with ammonia vessels can have a major impact on producers.
Due to the cost of shipping, most ammonia is converted to fertilisers and other industrial products at the production site.
Global production & demand
Asia is the largest producer at about 43-48% of total production, followed by North America. Asia is more or less self-sufficient (with the exception of India), whereas North America relies on imports.
The US has become the world’s largest importer of ammonia, owing to high gas prices in the US coupled with low priced ammonia imported from countries with a low gas cost.
According to the International Fertiliser Industry Association (IFA), world ammonia production in 2008 was 153 million tonnes, declining by 1% over the previous year.
However, according to the IFA 2009 World Capacity survey, global ammonia capacity is likely to increase by 20% to 218 million tonnes per year (tpy) by 2013. The majority of this growth will be in China, Middle East, Latin America and Africa.
Over the past 30 years the production of ammonia has moved from sites in developed countries to those in less developed countries, in order to be closer to the main markets for fertiliser (China, India, Indonesia).
Less than half of all ammonia production now takes place in developed countries, whereas in the mid 1970s the figure was closer to three quarters.
A restructuring of the market is expected, for example the closing of inefficient plants and withdrawal of companies declaring fertiliser production a non-core business.
This is directly affected by the price of natural gas, as even in low-cost natural gas regions, the gas cost accounts for around 80% of the ammonia production cost.