World ammonia consumption for agricultural and industrial uses grew consistently over the past 10 years at a compound annual growth rate of 2.0 percent. We expect the majority of new ammonia projects will be associated with downstream production capacity (such as urea or nitrogen solutions). Therefore, we believe the merchant ammonia market will maintain a firmer balance compared to urea markets.
While several new nitrogen plants are projected to come online over the medium term, recent history suggests that projects can be delayed and, in some cases, canceled. Therefore, the potential reduction in operating rates that many consultants are projecting will be highly dependant on the successful completion of a number of proposed projects.