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Ammonium nitrate is used mainly as a nitrogen fertilizer material and accounts for about 15% of the world nitrogen fertilizer market. World AN production in 2006 was more than 15 million metric tons (nitrogen content) with an estimated fob value of about $6.5 billion. Industrial use of ammonium nitrate, primarily as an explosive material, accounts for 15–20% of world ammonium nitrate consumption.
Following its commercial evolution after World War II, AN supply/demand grew steadily for many years and the AN market is now mature. Once the primary nitrogen fertilizer product, ammonium nitrate has lost this position to urea, which has a higher nitrogen content, is more stable, has a lower transportation cost on a nitrogen-content basis and is often less costly to produce. This report reviews the recent history of the ammonium nitrate industry and discusses prospects for its supply and primary markets.
The industry decline since 1988 was largely due to a major drop in consumption and production in the former USSR and Eastern Europe, the result of the economic turmoil these regions experienced during the 1990s. Consumption in Western Europe also declined because of a general decline in nitrogen fertilizer consumption resulting from changes in the European Union’s agricultural subsidy policy. Consumption in the former USSR and Eastern European regions dropped by a combined 3.0 million metric tons of nitrogen between 1986 and 2006.
A marginal average annual world growth rate for ammonium nitrate of about 0.8% is projected for the forecast period to 2011. Urea has become the solid nitrogen fertilizer material of choice throughout most of the world and will account for most of the expected growth in nitrogen fertilizer during the forecast period. Urea also enjoys a production cost advantage over ammonium nitrate. It does not contribute to groundwater nitrate contamination as much as ammonium nitrate.
The following pie chart shows world consumption of ammonium nitrate:
Because of security apprehensions following the September 2001 attack on the World Trade Center and the explosion of the Grand Paroisse warehouse in Toulouse, France, stringent measures to reduce the risk posed by ammonium nitrate were introduced in May 2003. In the past few years, several countries, including China, Colombia, Algeria and the Philippines, have banned fertilizer-grade ammonium nitrate. Restrictions on ammonium nitrate certification, transportation and storage conditions are having a great impact on the countries of the former USSR, and the market is expected to trend lower along with reduced consumption levels in Western Europe. |
