Critical Minerals and Energy Intelligence

China moves to halt sulphuric acid exports as war-driven supply shock deepens

China is planning to halt sulphuric acid exports from May, tightening an already stressed market for one of mining’s most important industrial chemicals, according to Argus Media — increasing risks for copper, nickel and fertilizer supply chains.

Since the start of the Middle East crisis and closure of the Strait of Hormuz, sulphur prices have increased approx 70%; and, for example, sulphuric acid prices in Chile, which buys over 1 million tons of Chinese sulfuric acid every year where a fifth of the copper output in Chile — the world’s No. 1 producer — involves a type of processing that depends on sulfuric acid, have increased 44% in just one month.

Sulfur prices CNYT - The Oregon Group - Critical Minerals and Energy Intelligence

Sulfuric acid prices up 44 in Chile in the past one month - The Oregon Group - Critical Minerals and Energy Intelligence

The problem, as we highlighted in our recent analysis — Strait of Hormuz is chokepoint for sulphuric acid and critical metal processing — the Middle East accounted for around 24% of global sulphur production at 83.87 million metric tons last year; including 50% of seabourne trade of sulphur, which must be exported via the Strait of Hormuz.

And, the sulphuric acid market was already tight before the latest Middle East disruption, increasing 500% before the latest conflict in Iran started.

Sulphuric acid is a core input across hydrometallurgy, especially for acid-intensive processing routes such as HPAL nickel and oxide copper leaching. For example, Indonesia has the clearest exposure to the tightening sulphur supply — the country now accounts for more than 60% of global nickel production — and imports around 75% of its sulphur from the Middle East.

The loss of Chinese volumes will be difficult to offset, given the parallel shortage of sulfur feedstocks, according to Peter Harrisson, an acid analyst at consultancy CRU told Bloomberg.

Bloomberg also reports that Beijing’s planned export halt will cover sulphuric acid produced as a byproduct of copper and zinc smelting, cutting another source of supply to overseas buyers just as war disruption has already squeezed the market.

A tighter acid market threatens higher costs and possible bottlenecks for miners and processors in major producing regions, including African copper belts and Indonesia’s nickel sector, both of which depend heavily on reliable sulphur and acid supply.

For a market already discovering that sulphuric acid can become a strategic choke point, China’s planned ban is another sign that this crisis is spreading far beyond oil.

Read our latest analysis:

Strait of Hormuz is chokepoint for sulphuric acid and critical metal processing

Subscribe for Investment Insights. Stay Ahead.

Investment market and industry insights delivered to you in real-time.

[mepr-membership-registration-form id="4595"]

Disclaimer

The Oregon Group maintains full editorial control over all content published on this website. While sponsored and advertised placements may be featured, the content remains the sole opinion of The Oregon Group. The author may receive compensation or remuneration for providing content, but all statements and expressions are made independently and are not influenced by sponsors or advertisers. From time to time, The Oregon Group and its directors, officers, partners, employees, authors, or members of their families, as well as persons who are interviewed for articles on this website, may have a long or short position in securities or commodities mentioned and may make purchases and/or sales of those securities or commodities in the open market or otherwise. By accessing and using this website, readers are cautioned to assume that each of the foregoing persons may have a financial interest in all companies and sectors mentioned on this website. Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable., and any such statements are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities or commodities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and The Oregon Group undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material. The information provided on this website is for informational purposes only and is not, directly or indirectly, an offer, solicitation of an offer and/or a recommendation to buy or sell any security or commodity, and the information provided on this website should not be construed as any advice or an opinion as to the price at which the securities of any company or commodity may trade at any time. The Oregon Group is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient, and the information provided on this website is not and should not be construed as personal, financial, investment or professional advice. Readers are cautioned to always do their own research and review of publicly available information and to consult their professional and registered advisors before purchasing or selling any securities or commodities and should not rely on the information contained herein. Neither The Oregon Group nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.