Global Urea Market By Purity(Below 90%, 90-95%, Above 95%), By Grade(Technical Grade, Fertilizer Grade, Feed Grade Urea), By Application(Agriculture, Chemical Synthesis, Animal Feed, Others), By End-Use(Fertilizer, Urea Formaldehyde Resin, Others) , By Region, and Key Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The global Urea Market size is expected to be worth around USD 99.3 billion by 2033, from USD 72.5 billion in 2023, growing at a CAGR of 3.2% during the forecast period from 2023 to 2033.

The urea market refers to the global industry centered around the production, distribution, and usage of urea, a white crystalline solid containing 46% nitrogen, which is the highest nitrogen content of all solid nitrogenous fertilizers available. Urea is synthesized from ammonia and carbon dioxide under high pressure and temperature and is primarily used as a fertilizer to promote plant growth by providing them with the necessary nitrogen.

Beyond its predominant role in agriculture, urea is also used in various industrial applications. It serves as a raw material in the manufacture of urea-formaldehyde resins, which are used to make adhesives and finishes for a wide range of products including plywood, particleboard, and molding compounds. Urea is also used in the production of plastics, particularly urea-formaldehyde plastics, as well as in the pharmaceutical industry to make certain drugs.

Another significant application of urea is in the automotive sector, where it is a primary component of the fluid used in selective catalytic reduction (SCR) systems to reduce emissions of nitrogen oxides from diesel engines. This solution, commonly known as AdBlue in Europe and DEF (Diesel Exhaust Fluid) in the United States, helps in converting NOx into nitrogen and water, thus significantly reducing air pollution.

The dynamics of the urea market are influenced by factors such as global agricultural activity, the demand for crop yield enhancement, industrial growth, environmental regulations, and innovations in product application. Pricing and market movements are closely tied to the costs of natural gas (as it is a primary input in urea production), geopolitical factors affecting supply chains, and the overall economic conditions influencing agriculture and industrial production.

Key Takeaways

1. Market Size and Growth: Expected to reach USD 99.3 billion by 2033, growing at 3.2% CAGR from USD 72.5 billion in 2023.
2. Above 95% purity dominated the market in 2023, capturing over 42.2% share.
3. Fertilizer Grade held the largest market share in 2023, accounting for more than 48.6%.
4. Agriculture dominated with over 68.2% market share in 2023.
5. The fertilizer segment held a dominant position with more than 65.5% market share in 2023.
6. Asia Pacific region emerges as a dominant force in the urea market, boasting a substantial market share of 43.3%.

By Purity

In 2023, Above 95% held a dominant market position, capturing more than a 42.2% share of the urea market. This segment includes urea of the highest purity, which is preferred for its efficiency and effectiveness in agricultural applications. High-purity urea ensures optimal nutrient availability for crops, leading to enhanced growth and yield. This level of purity is also crucial in reducing impurities that can cause harm to crop health and soil quality.

The 90-95% purity segment also plays a significant role in the market, particularly in industrial applications where slightly lower purity is acceptable. Urea of this purity level is commonly used in the production of resins and adhesives, where it functions as a key ingredient in urea-formaldehyde resins widely used in the woodworking industry. Its effectiveness in these applications makes it a popular choice among manufacturers seeking a balance between cost and performance.

The Below 90% purity segment caters primarily to specific industrial applications where high purity is not a critical requirement. This includes uses in certain chemical processes and lower-grade fertilizers where cost considerations outweigh the benefits of higher purity. Urea in this range is also utilized in some pollution control applications, such as in the production of urea-based solutions used for the reduction of nitrogen oxide emissions from industrial plants.

By Grade

In 2023, Fertilizer Grade held a dominant market position, capturing more than a 48.6% share of the urea market. This segment’s prominence is driven by urea’s essential role in agriculture as a high-nitrogen fertilizer, crucial for promoting plant growth and increasing crop yields. Fertilizer-grade urea is specifically formulated to dissolve easily and provide nitrogen efficiently to plants, making it a staple in farming operations worldwide. Its cost-effectiveness and high nitrogen content make it a preferred choice for farmers looking to optimize agricultural productivity.

Technical Grade urea, while holding a smaller share in the market, is vital in various industrial applications. This grade of urea is used in the manufacture of plastics, adhesives, and chemicals, where purity and specific chemical properties are required to meet rigorous industrial standards. It also plays a role in environmental applications, such as in diesel exhaust fluids used to reduce emissions from diesel engines.

Feed-grade urea represents another important segment, primarily used as a non-protein nitrogen supplement in animal feed. It helps in the cost-effective nourishment of ruminants by providing them with a source of nitrogen that can be converted into protein through microbial action in the rumen. This grade of urea is formulated to be safe and effective for animal consumption, supporting the nutritional needs of livestock without compromising health.

By Application

In 2023, Agriculture held a dominant market position, capturing more than a 68.2% share of the urea market. This segment’s substantial share underscores urea’s pivotal role as a nitrogen fertilizer, which is crucial for boosting crop growth and productivity. In agriculture, urea is valued for its high nitrogen content, which is essential for the synthesis of proteins in plants. It’s easily applicable, either directly to the soil or through foliar sprays, and is cost-effective, making it a go-to choice for farmers worldwide aiming to enhance yield and crop quality.

The Chemical Synthesis segment also plays a crucial role in the urea market, though it commands a smaller share compared to agriculture. Urea is a key ingredient in the production of plastics, resins, and adhesives, particularly urea-formaldehyde, which is extensively used in the manufacturing of composite wood products like plywood and particle board. Its properties make it suitable for a variety of chemical reactions and products, supporting its steady demand in industrial applications.

Animal Feed is another important application where urea is used as a non-protein nitrogen source for ruminants such as cattle and sheep. In this segment, urea is incorporated into feed to help animals more efficiently use the carbohydrates in their diets, effectively increasing the protein content of their feed. This usage supports the nutritional needs of livestock economically, contributing to the efficiency of agricultural operations.

By End-Use

In 2023, Fertilizer held a dominant market position, capturing more than a 65.5% share of the urea market. This significant market share highlights urea’s essential role as a high-nitrogen fertilizer, crucial for enhancing crop yields and improving soil health.

Urea’s popularity in agriculture stems from its cost-effectiveness and high efficiency in providing the nitrogen necessary for plant growth. Its ease of application—whether directly to the soil or through various irrigation systems—makes it a preferred choice for farmers globally, helping to meet the increasing food demands of a growing population.

The Urea Formaldehyde Resin segment also constitutes a vital part of the urea market, albeit with a smaller share compared to fertilizers. Urea-formaldehyde resins are extensively used in the production of composite wood products such as particleboard and plywood, as well as in adhesives and coatings. The demand in this segment is driven by the construction and furniture industries, where the strength, water resistance, and cost-effectiveness of urea-formaldehyde resins are highly valued.

Key Market Segments

By Purity

• Below 90%
• 90-95%
• Above 95%

By Grade

• Technical Grade
• Fertilizer Grade
• Feed Grade Urea

By Application

• Agriculture
• Chemical Synthesis
• Animal Feed
• Others

By End-Use

• Fertilizer
• Urea Formaldehyde Resin
• Others

Drivers

Global Increase in Agricultural Demand

A major driver of the urea market is the global increase in agricultural demand, fueled by the growing need to enhance crop yields to feed an expanding population. As the world population continues to rise, projected to reach nearly 10 billion by 2050, the pressure on agricultural systems to produce more food has intensified. Urea, as a high-nitrogen fertilizer, plays a pivotal role in meeting this demand by significantly enhancing the growth and health of crops.

Urea is favored in agriculture due to its high nitrogen content, which is essential for the synthesis of proteins in plants, and crucial for their growth and development. It efficiently delivers nitrogen to plants, making it one of the most effective and widely used agricultural fertilizers globally. The ease of application and cost-effectiveness of urea further contribute to its extensive use, allowing farmers to achieve better crop productivity and profitability.

Moreover, the shift towards more intensive farming practices to maximize arable land use also drives the demand for urea. As land availability becomes more constrained, the need for high-efficiency fertilizers like urea that can boost crop output per hectare increases. This is particularly significant in developing countries, where agriculture forms a substantial part of the economy and food security is a pressing issue.

In addition to its direct benefits to crop production, urea is also crucial in modern agricultural strategies aimed at sustainability and environmental stewardship. Techniques such as precision agriculture, which involves the precise application of inputs like fertilizers to optimize growth and minimize waste, often rely on urea due to its adaptability and effectiveness. By improving nitrogen use efficiency, urea helps in reducing the environmental impact of farming, such as the minimization of nitrogen runoff that can lead to water pollution.

Furthermore, the development of enhanced-efficiency fertilizers (EEFs), which are urea-based products modified to reduce nitrogen loss and increase nutrient uptake by crops, represents an innovative advancement in the fertilizer industry. These products cater to the growing market demand for sustainable agricultural inputs, which not only improve crop performance but also align with global environmental goals.

Restraints

Environmental Concerns and Regulatory Restrictions

A significant restraint facing the urea market is the growing environmental concerns and regulatory restrictions related to nitrogen runoff and emissions. Urea, when used as a fertilizer, releases nitrogen into the soil, which if not fully absorbed by plants, can lead to environmental pollution through leaching and volatilization.

Nitrogen that leaches into the groundwater or volatilizes into the atmosphere as ammonia or nitrogen oxides contributes to water contamination, eutrophication of water bodies, and air pollution. These environmental impacts have led to increased scrutiny and regulatory measures aimed at controlling the use and application rates of nitrogenous fertilizers like urea.

Governments and environmental organizations worldwide are imposing stricter regulations on the use of chemical fertilizers, including urea, to mitigate their negative effects on the environment. These regulations often require the adoption of best management practices (BMPs) for fertilizer application, such as timing and method adjustments to minimize nitrogen losses. In some regions, there are limits on the total amount of nitrogen that can be applied to fields, which directly affects the consumption of urea-based fertilizers.

Furthermore, the push for environmental sustainability is driving the demand for organic farming practices, which typically exclude the use of synthetic fertilizers like urea. The increasing consumer preference for organically grown food is encouraging more farmers to shift to organic farming methods, potentially reducing the market for urea fertilizers. This trend is supported by various government incentives and subsidies for organic farming, which aim to promote environmentally friendly agricultural practices.

The development of alternative sustainable fertilizers, such as those derived from bio-based sources or those that include nitrification inhibitors to reduce nitrogen losses, also poses a challenge to the urea market. These products are gaining popularity as they are perceived to be more environmentally benign while providing similar or even enhanced efficacy in terms of plant nutrition.

Additionally, public awareness and advocacy for environmental protection are heightening, leading to increased community resistance to the extensive use of chemical fertilizers. This societal pressure can influence policymaking, leading to stricter regulations and potentially reducing the reliance on urea-based products.

Opportunity

Expansion into Enhanced-Efficiency Fertilizers

A significant opportunity within the urea market lies in the development and expansion of enhanced-efficiency fertilizers (EEFs). These specialized fertilizers, which include urea formulations modified to minimize nitrogen losses and increase nutrient uptake efficiency, are poised to transform agricultural practices by addressing environmental concerns while boosting crop productivity.

Enhanced-efficiency fertilizers are designed to reduce the volatilization, leaching, and denitrification that often accompany traditional urea applications. By incorporating technologies such as urease inhibitors, which slow the conversion of urea to ammonia, and nitrification inhibitors, which delay the conversion of ammonium to nitrate, EEFs ensure that more nitrogen remains available to plants for a longer period. This not only improves the efficiency of nitrogen use but also significantly mitigates the environmental impact associated with nitrogen losses.

The push for sustainable agriculture is driving the demand for these advanced products. As regulatory pressures increase and the global community becomes more aware of the environmental impacts of conventional fertilizers, the market for EEFs is expanding. Farmers are seeking solutions that not only meet their crop yield goals but also comply with environmental regulations and standards for sustainability. This shift is supported by governments and international bodies that are implementing policies to promote the use of environmentally friendly agricultural inputs.

Additionally, the global increase in food demand, coupled with the finite availability of arable land, compels the agricultural sector to seek more efficient and effective fertilization methods. EEFs represent a crucial innovation in this area, offering the potential to increase crop yields without corresponding increases in fertilizer inputs. This is particularly appealing in regions facing intense agricultural productivity challenges and those with strict environmental protection guidelines.

Moreover, the market expansion into EEFs is also fueled by technological advancements in fertilizer production. The development of new formulations that are more stable and effective under a range of environmental conditions allows for broader geographic and crop-specific applications. Companies investing in research and development to improve and diversify EEF products can capture significant market share in this emerging sector.

Trends

Growing Adoption of Precision Agriculture

A significant trend impacting the urea market is the growing adoption of precision agriculture techniques, which are revolutionizing farming practices by enabling more efficient and targeted fertilizer application.

Precision agriculture leverages technologies such as GPS, sensors, drones, and data analytics to optimize field-level management regarding crop farming. This trend is particularly influential for urea usage, as it enhances the efficiency of fertilizer application, reducing waste and environmental impact while maximizing agricultural productivity.

Precision agriculture tools allow farmers to map both the variability in field conditions and the specific requirements of crops at different growth stages. This capability enables the precise application of urea-based fertilizers, ensuring that the right amount is applied at the optimal time and place, enhancing nutrient uptake, and minimizing losses due to leaching or runoff.

For example, variable rate technology (VRT) can adjust the amount of urea dispensed by spreaders based on real-time field data, which significantly improves the effectiveness of the fertilizer and reduces excess usage.

Moreover, the integration of sensor technology and data analytics helps in monitoring soil health and plant needs in real time. Sensors can detect the level of nutrients in the soil and the condition of crops, providing critical data that informs the application of urea. This data-driven approach ensures that urea is used efficiently, supporting sustainable farming practices and reducing the environmental footprint of agriculture.

The push towards smart farming and the increasing availability of affordable and advanced technology are propelling the adoption of precision agriculture. As these technologies become more widespread, the demand for urea is expected to be more targeted and judicious, with a focus on achieving high yields without over-fertilization. This shift is aligned with global efforts to combat the adverse effects of traditional farming methods on the environment, such as groundwater contamination and greenhouse gas emissions.

The trend towards precision agriculture is also driven by the need to adapt to changing climate conditions, which affect rainfall patterns and temperature, impacting crop growth and fertilizer requirements. By using precision agriculture methods, farmers can respond more effectively to these changes, optimizing urea usage to suit specific environmental conditions and crop needs.

Regional Analysis

The Asia Pacific region emerges as a dominant force in the urea market, boasting a substantial market share of 43.3%. Projections indicate that the market is poised to achieve a valuation of USD 31.4 billion by the end of the forecast period, buoyed by robust adoption across critical sectors such as agriculture, chemical manufacturing, and industrial applications.

This growth trajectory is chiefly propelled by powerhouse economies like China, India, Japan, and South Korea, where a notable uptick in urea production and utilization is observed. These countries are actively responding to the escalating demand for nitrogen fertilizers and industrial chemicals, underscoring the region’s steadfast commitment to pioneering manufacturing and export practices in the urea market.

In North America, the urea market is witnessing steady expansion. This upward trend is underpinned by growing demand from industries that leverage urea for agricultural fertilization, urea-formaldehyde resins, and automotive emissions control systems. The region’s diverse industrial landscape and advancements in chemical technologies play pivotal roles in fostering the adoption of urea products.

Key Regions and Countries

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia & CIS
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • ASEAN
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of MEA

Key Players Analysis

In the dynamic landscape of the urea market, several key players stand out, each contributing to the industry’s growth and innovation. Leading the charge is Yara International ASA, renowned for its extensive portfolio of urea products tailored to diverse agricultural and industrial applications.

Leveraging advanced research and development capabilities, Yara International ASA continues to introduce cutting-edge solutions that meet evolving market demands while maintaining a competitive edge.

Additionally, CF Industries Holdings, Inc. holds a prominent position in the urea market. With a focus on sustainability and innovation, CF Industries offers a wide range of urea grades optimized for agricultural fertilization, industrial chemical production, and environmental applications, catering to the needs of various end-use sectors.

Furthermore, OCI Nitrogen, a global leader in nitrogen-based fertilizers and chemicals, emerges as a key player in the urea market. Through continuous investments in research and development, OCI Nitrogen delivers high-quality urea solutions that drive value for customers while promoting sustainability and operational excellence.

Market Key Players

• Yara International ASA
• SABIC
• Qatar Fertiliser Company
• OCI NV
• CF Industries Holdings, Inc.
• EuroChem Group AG
• Nutrien AG
• Koch Fertilizer, LLC
• Coromandel International Limited
• Acron Group
• Chambal Fertilisers and Chemicals Ltd
• Uralchem Group
• Others

Recent Developments

Yara International ASA saw significant fluctuations in the urea market, notably with a decline in urea prices which impacted their financial performance negatively. By the first quarter of 2024, the urea prices remained stable initially but increased globally by early February, influenced by various regional activities and market dynamics.

In 2023, SABIC, a global leader in diversified chemicals, including the urea sector, experienced a challenging financial year. The company’s total revenue for 2023 amounted to SAR 141.54 billion, reflecting a decline of 23% compared to the previous year.

Report Scope