Lagos — The global demand growth of ammonia is expected to remain sluggish between 2020 and 2030 due to a COVID-19 led reduction in economic activities in addition to flattening population growth, says GlobalData, a leading data and analytics company.
Despite the severity of the impact of the pandemic, the top ammonia producers are likely to march ahead with their upcoming ammonia projects. The top ten countries are expected to contribute a total of 46.5 million tonnes per annum (mtpa), of which the top four account for more than two thirds of the capacity or 33.2 mtpa. India and Iran lead with 9.2 mtpa and 8.7 mtpa, respectively.
Global ammonia projects currently under the initial stages of development could face startup delays due to increased certainty regarding phasing and completion timelines, but it depends largely on the duration and severity of the COVID-19 outbreak.
Dayanand Kharade, Oil and Gas Analyst at GlobalData, comments: “The pandemic has seen mixed reactions from major ammonia producers, with only a few companies announcing capex cuts for the current year, as an immediate and proactive measure. Companies aim to dynamically optimize production and plan their investments in order to maintain long term competitiveness and growth. Yara International remains committed to investments, however, the company has stated that optimization due to COVID-19 may postpone some spending. Producers continue to evaluate their capital structure to identify further cost-effective investment opportunities.
“Most of the global economies had to follow lockdown measures undertaken by the government, leading to a slump in demand in 2020, with disruptions in food chain affecting the fertilizer industry.”