Key Takeaways
Sulphuric acid prices have more than doubled in six weeks to over $307 per metric tonne as a conflict-driven shutdown of the Strait of Hormuz and a looming Chinese export ban choke off global supply.
"Rapidly shrinking buffers amid continued disruptions, may herald future price spikes ahead," the International Energy Agency said in its recent monthly update, referring to the parallel crisis in the oil market.
The disruption to the Persian Gulf, which accounts for half of the world's seaborne sulphur trade, was compounded by China's April 10 decision to halt sulphuric acid exports starting in May 2026. China produces over 40 percent of the world's supply.
The dual shocks are sending ripples across the global economy, threatening to raise costs for everything from fertilizers and food to electric vehicle batteries and semiconductors, with a resolution unlikely for months.
A little-known global shortage of sulphuric acid is beginning to alarm industries worldwide. The chemical is a critical input for the global economy, with around 60 percent of supply used to make fertilizers. The remainder goes into manufacturing batteries, medicines, semiconductors, and processing key metals like copper and nickel.
The price explosion has been stark. Global prices jumped from around $149 per metric tonne in early March 2026 to over $307 by mid-April. Countries like Chile, Indonesia, and India are among the hardest hit. In Chile, the world's largest copper producer, delivered prices climbed nearly 54 percent to $270 per tonne, hurting output. In Indonesia, rising prices have forced cuts to nickel production, a key material for electric vehicle batteries.
For India, which is a major importer of Chinese sulphuric acid, prices have shot up from $149 to $278 per tonne. This directly translates to costlier fertilizers for farmers and, ultimately, higher food prices.
The disruption in the Strait of Hormuz, the world's most important oil shipping route, has also sent the oil market into a precarious state. Global oil inventories are falling at a record pace to compensate for the supply disruption.
Stockpiles, which were near a decade high at just over 8 billion barrels at the end of February, fell to 7.8 billion by the end of April, according to analysts at UBS. They are forecast to approach record lows of 7.6 billion barrels by the end of May. JPMorgan has warned that inventories could fall to a critically low level of 6.8 billion barrels by September if the strait remains closed, a level that would severely stress the global supply chain.
"The system does not fail because oil disappears, it fails because the circulation network no longer has enough working volume," said Natasha Kaneva, JPMorgan's head of global commodities strategy.
This article is for informational purposes only and does not constitute investment advice.
