Urea Market

Urea Market Size:

The global urea market size reached US$ 51.9 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 59.9 Billion by 2032, exhibiting a growth rate (CAGR) of 1.6% during 2024-2032. The establishment of new urea production facilities and collaborations among industry players, are driving the market growth. The market is further driven by increasing agricultural demand for nitrogen-based fertilizers, growing food demand necessitating higher crop yields, ongoing advancements in urea production technology, steadily increasing product applications across industries, and favorable government policies.

Urea Market Analysis:

• Major Market Drivers: The major drivers for the urea market include increasing global food demand, necessitating higher agricultural productivity, and the widespread use of urea as a nitrogen-rich fertilizer. Government subsidies and support for fertilizer use in developing countries further boost the demand. Additionally, advancements in agricultural practices and the expansion of urea applications in industrial sectors, such as resins and adhesives, also contribute to market growth.
• Key Market Trends: Key trends in the urea market involve the widespread adoption of slow-release and coated urea fertilizers to enhance efficiency and reduce environmental impact. The integration of digital farming technologies to optimize fertilizer application is also gaining traction, which, in turn, is increasing the urea market revenue. Furthermore, the market is seeing increased investment in sustainable and eco-friendly production methods, aligning with global environmental regulations and the push toward carbon neutrality in agricultural practices.
• Geographical Trends: Asia Pacific leads the urea market due to its large agricultural sector, driven by high population density and the need for increased food production in countries like China and India. Government support and subsidies for fertilizers further stimulate market growth. The region's rapid industrialization also boosts urea demand for various applications. Additionally, significant investments in agricultural technology and infrastructure enhance productivity and efficiency, solidifying Asia Pacific's dominance in the global urea market.
• Competitive Landscape: Some of the major market players in the urea industry include Acron Group, BASF SE, BIP (Oldbury) Limited, EuroChem, Jiangsu Sanmu Group Co. Ltd., Koch Fertilizer LLC, OCI N.V, Petrobras, Qatar Fertiliser Company, SABIC, Yara International ASA., among many others.
• Challenges and Opportunities: According to the urea market overview, several opportunities exist. These include the development of eco-friendly and highly efficient urea products that minimize environmental impact, expansion into emerging markets where demand for fertilizers is growing, and the adoption of advanced agricultural technologies that improve crop yields and resource management. Despite these opportunities, the market faces significant challenges. Fluctuating raw material prices can affect profitability, while environmental concerns related to excessive nitrogen use necessitate careful management to mitigate pollution and soil degradation. Additionally, stringent regulatory requirements can impose compliance costs and operational constraints. A key challenge for the market is balancing the need for increased agricultural productivity with the implementation of sustainable practices to ensure long-term environmental health.
   

Urea Market Trends:

Rising Demand for Nitrogen-Based Fertilizers

The global urea market is majorly driven by the increasing demand for nitrogen-based fertilizers in agriculture. According to industry reports, global fertilizer consumption is expected to recover by 4% in 2023, reaching 192.5 million metric tons (mmt), which is an increase from a low in previous years due to high prices. It further projects a 5% increase in 2024, with global nitrogen fertilizer consumption estimated at 108 mmt and production at 109 mmt. Urea is a key source of nitrogen, essential for plant growth and crop yield improvement. With the global population rising, the need for enhanced food production is escalating, leading to greater usage of urea in farming practices. This, in turn, is creating a positive urea market outlook across the globe. For instance, projections from FAO indicate that to feed a global population of 9.1 billion by 2050, overall food production must increase by approximately 70%. In developing countries, production would need to nearly double to meet this demand. This demand is particularly high in regions with intensive agricultural activities, where maximizing crop output is crucial.

Significant Advancements in Urea Production Technology

Technological advancements in urea production have significantly boosted market growth. Innovations such as more efficient production processes, cost-effective methods, and environmentally friendly technologies have made urea manufacturing more viable and sustainable. These advancements not only reduce production costs but also improve the quality and consistency of urea, making it a more attractive option for agricultural and industrial applications, thereby driving urea market growth. For instance, in July 2024, NEXTCHEM, a division of MAIRE, was chosen by Linggu Chemical Co. Ltd. to enhance the energy efficiency of a 3,100 metric tons per day urea plant in China through its subsidiary Stamicarbon. NEXTCHEM will supply the necessary licensing and process design. The project will employ their Advanced MP Flash Design technology, part of the EVOLVE Energy™ series, aiming to reduce the plant's energy consumption by up to 20% by optimizing steam usage and feedstock utilization.

Government Policies and Support

Supportive government policies and subsidies for agricultural inputs play a crucial role in driving the urea market toward growth. Governments worldwide are implementing policies to promote agricultural productivity and ensure food security. Subsidies for fertilizers, including urea, make them more affordable for farmers, encouraging widespread use. Additionally, regulations supporting the use of nitrogen fertilizers in various regions further stimulate the product demand, as farmers seek to enhance crop yields and maintain soil fertility.

For instance, according to industry reports, India plans to stop importing urea by the end of 2025. The government is implementing a two-pronged strategy, reviving closed urea plants and promoting alternative fertilizers like nano liquid urea. Domestic production capacity has increased to 310 lakh tonnes, aiming for 325 lakh tonnes annually. The government's initiatives include substantial subsidies to ensure affordable fertilizers for farmers and efforts to replace conventional urea with nano liquid variants.

Urea Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on grade, application, and end-use industry.

Breakup by Grade:

• Fertilizers Grade
• Feed Grade
• Technical Grade
   

Technical grade accounts for the majority of the market share

A detailed breakup and analysis of the market based on the grade has been provided in the report. This includes fertilizers, feed, and technical grades. According to the report, technical grade represented the largest segment.

The urea market forecast predicts technical grade urea to hold the majority of the market share due to its diverse industrial applications beyond agriculture. It is a key component in the manufacturing of resins, adhesives, and coatings, which are widely used in industries such as automotive, construction, and furniture. Additionally, technical grade urea is crucial in the production of diesel exhaust fluid (DEF), which reduces nitrogen oxide emissions from vehicles, aligning with stringent environmental regulations. Its role in pharmaceuticals, cosmetics, and as a de-icing agent further boosts demand, making it indispensable across multiple sectors and securing its dominant market position.

For instance, recent data indicates that the annual demand for technical-grade urea for industrial use is approximately 1.3 to 1.4 million tons, while domestic production is around 150,000 tons. The manufacturing sector imports only about 200,000 tons, falling significantly short of the required quantity, which exceeds one million tons.

Breakup by Application:

• Nitrogenous Fertilizer
• Stabilizing Agent
• Keratolyte
• Resin
• Others
   

Nitrogenous fertilizer holds the largest share of the industry

The urea market report has also provided a detailed breakup and analysis of the market based on the application. This includes nitrogenous fertilizer, stabilizing agent, keratolyte, resin, and others. According to the report, nitrogenous fertilizer accounted for the largest market share.

Nitrogenous fertilizer holds the largest share of the urea industry due to its critical role in agriculture. Urea, a highly concentrated nitrogen source, is essential for promoting plant growth and increasing crop yields. Its efficiency, cost-effectiveness, and ease of application make it the preferred choice among farmers worldwide. Additionally, nitrogen is a vital nutrient for photosynthesis and protein synthesis in plants, further driving the demand for urea-based fertilizers. With the growing global population and the consequent need for enhanced agricultural productivity, the reliance on nitrogenous fertilizers, particularly urea, remains strong, ensuring its dominant market share. According to the industry reports, the world currently uses twice the amount of nitrogen fertilizer needed, yet production capacity is projected to increase by 6%, reaching 202 million tonnes by 2027.

Breakup by End-Use Industry:

• Agriculture
• Chemical
• Automotive
• Medical
• Others
   

Agriculture represents the leading market segment 

The report has provided a detailed breakup and analysis of the market based on the end-use industry. This includes agriculture, chemical, automotive, medical, and others. According to the report, agriculture represented the largest segment.

Agriculture represents the leading urea market segment due to its crucial role as a nitrogen fertilizer, essential for promoting plant growth and increasing crop yields. Urea is widely used in various farming practices because it provides a high concentration of nitrogen, vital for healthy crop development. The growing global population and rising food demand drive the agricultural sector to enhance productivity, increasing urea demand. Additionally, its cost-effectiveness, ease of application, and suitability for diverse crops make urea a preferred choice among farmers, solidifying its market dominance.

For instance, in December 2023, Yara announced the acquisition of Agribios Italiana's organic-based fertilizer business, enhancing Yara's organic strategy in Europe. Agribios, with a market share of 10% in Italy, produces approximately 60,000 metric tons of organic-based fertilizers annually. This move is expected to increase Yara's sales in the organic-based fertilizer market in Italy and neighboring countries by around 30% within the next three years.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific leads the market, accounting for the largest urea market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific represents the largest regional market for urea.

The Asia Pacific region leads the urea market due to several factors. High population density in countries like China and India drives significant demand for food, necessitating increased agricultural productivity. Urea, being a key nitrogen fertilizer, is crucial for enhancing crop yields to meet this demand. According to industry reports, India's domestic urea production increased by 13.4% in 2023, reaching 31.11 million tonnes, up from 27.43 million tonnes in 2022. The country currently operates four fertilizer plants, with plans to open a fifth, Talcher Fertilisers Ltd, in September 2024, which will have an annual production capacity of 3.85 million tonnes. Urea availability in 2023 rose by 3.65%, from 39.71 to 41.16 million tonnes, while sales increased by 3.25%, from 36.91 to 38.11 million tonnes. This steady growth highlights the significance of domestic production in ensuring urea availability and meeting agricultural demand.

Additionally, government initiatives and subsidies in these countries support urea production and usage, making it more accessible to farmers. The region's rapid industrialization also contributes to the demand for urea in industrial applications. For instance, China's fertilizer industry, one of the largest globally, is undergoing a transformation towards sustainability and efficiency, driven by goals to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. The Belt and Road Initiative (BRI) further supports China's fertilizer industry by expanding access to raw materials and new export markets, aligning with the urea market forecast for increased global trade and supply chain enhancements.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the major market players in the urea industry include Acron Group, BASF SE, BIP (Oldbury) Limited, EuroChem, Jiangsu Sanmu Group Co. Ltd., Koch Fertilizer LLC, OCI N.V, Petrobras, Qatar Fertiliser Company, SABIC, Yara International ASA.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
   
• The urea market's competitive landscape is characterized by a mix of large-scale producers and regional manufacturers. Key factors driving competition include production capacity, technological advancements, and access to raw materials like natural gas. Urea companies are investing in expanding production facilities and adopting innovative technologies to enhance efficiency and reduce costs. For instance, in September 2023, SABIC Agri-Nutrients Company (SABIC AN) has partnered with US-based ADM and BiOWiSH Technologies to promote sustainable agriculture. This collaboration focuses on a 50,000-acre pilot project in the Midwest, using SABIC AN's biologically enhanced urea fertilizer, which reduces greenhouse gas emissions and sequesters atmospheric carbon dioxide.
• Moreover, the urea market is significantly shaped by government policies and subsidies, which not only promote domestic production but also influence pricing strategies. These policies can provide financial incentives for production and impact the overall market dynamics. Additionally, some of the urea market recent opportunities, driven by the global demand for urea in agriculture and industrial applications, create prospects for both established players and new entrants, fostering a dynamic and competitive environment. Regional market leaders often benefit from proximity to key agricultural markets and favorable trade agreements, further enhancing their competitive edge.

Urea Market News:

• In February 2024, Egyptian urea producer Helwan signed an agreement with SML-INNO UK to produce 130,000 tons per year of black urea. The product is anticipated to enhance crop growth while using 25-30% less nitrogen than conventional urea. The project, targeting European and UK markets, is expected to cost $5 million. Helwan also operates a 635,000 tons per year granular urea facility.
• In April 2023, SABIC Agri-Nutrients Company acquired a 49% stake in ETG Inputs Holdco Limited, part of the ETC Group, for USD 320 million. This acquisition aligns with SABIC Agri-Nutrients Company's strategy to integrate the value chain and enhance the distribution of agri-nutrients markets.

Urea Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the urea market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global urea market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the urea industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.