An important commodity for everything from medicine to agriculture and mining, sulfur rarely makes the headlines. But the Iran war shows why the world should pay close attention.
That’s because by depressing the global energy market, the escalating conflict is also wreaking havoc on the global sulfur trade, which today largely produced as a product from the oil and gas industry. Once converted to sulfuric acid—known as the “king of chemicals”—it works in the fertilizer, metals, and pharmaceutical industries. Which means that any disruption to the sulfur market reverberates far beyond it.
An important commodity for everything from medicine to agriculture and mining, sulfur rarely makes the headlines. But the Iran war shows why the world should pay close attention.
That’s because by depressing the global energy market, the escalating conflict is also wreaking havoc on the global sulfur trade, which today largely produced as a product from the oil and gas industry. Once converted to sulfuric acid—known as the “king of chemicals”—it works in the fertilizer, metals, and pharmaceutical industries. Which means that any disruption to the sulfur market reverberates far beyond it.
Given its dominance in energy production, the Middle East is also a sulfur powerhouse. The region accounts for about half of all global sulfur sales, with top regions including China, India, Indonesia and the United States, said Meena Chauhan, head of sulfur and sulfuric acid research at Argus Media, which provides global energy and commodity intelligence.
But the Iran war—along with the resulting standoff in the Strait of Hormuz—has shut down that flow, endangering supply chains around the world.
“We are now in uncharted territory, because of the importance of the Middle East,” Chauhan said.
Part of the problem is that even before the Iran war started in February, the sulfur market was already closed. Prices have been on the verge of rising for three or four years due to Russia’s invasion of Ukraine, as well as new demand from Indonesia’s fertilizer industry and nickel industry, said James Willoughby, a research analyst at Wood Mackenzie, an energy research firm.
All these pressures have only increased with the Iran war. As the conflict has reduced energy production, sulphur price to have jump upan indication of how both sectors are intertwined. The industry has now come under so much stress that countries are taking steps to insulate their economies from the shock. Turkey announced a ban on sulfur exports last week, and India is also mulling its own export restrictions, Reuters information.
From May, China is also reported to arrange stop exporting sulfuric acid produced as a by-product of smelting copper and zinc. China is the world’s leading importer of sulfur and also the largest producer of sulfur, with China’s production last year accounting for about 16 percent of the global market—although that amount is spent domestically, said Chauhan.
At the same time, China is also the world’s largest supplier of sulfuric acid, with sales last year accounting for 20 percent of global sulfuric acid trade, Chauhan said. Top destinations include Chile, which relies on sulfuric acid in its copper industry; Indonesia, which has a thriving nickel industry; and Morocco and Saudi Arabia, which use sulfuric acid for processed phosphate, he said.
Beijing’s possible moves are likely aimed at protecting its economy from external pressures, analysts said. “It’s very clear, given how important this product is, the ban is really a strategic effect to protect domestic consumers,” said Sangita Gayatri Kannan, who researches mineral and energy economics at the Colorado School of Mines.
But all of those trade restrictions, which come on top of the economic shock waves of the Iran war, are only set to further drive up prices and squeeze an already strained market. That’s because sulfuric acid is not easily replaced or replaced overnight, and it would be difficult for anyone to assemble enough supplies of sulfur to cover a business that has been disrupted by conflict in the Middle East.
“Even combining all those distribution points around the world is still not enough to reach the amount that the Middle East exports,” said Chauhan.
Since sulfuric acid is the basis of phosphate fertilizers, the global sulfur situation promises to refine further. agricultural marketswhich have already been feeling the pain of the Iran war. The Middle East is a major fertilizer hub, and weeks of war and shipping disruptions have sent it fertilizer costs increase worldwide.
It also spells trouble for the mining industry, which relies on sulfuric acid for extraction and processing. Dry sulfur traders based in Asia are reported now dance to find alternative supplies, Bloomberg reported, while Indonesian nickel producers that import much of their sulfur from the Middle East may forced to reduce production.
Robert Friedland, founder of Ivanhoe Mines, said in post on X that the Middle East is the source of more than 90 percent of the sulfur imported into Africa.
“I have heard that traders are already struggling to get anything. So the price of sulfuric acid will increase significantly in Africa,” he said. he wrote. “If the disruption lasts longer than ~3 weeks, the copper oxide operation will have to be shut down as it has run out of acid.”
If the Iran war continues to depress energy production and global trade, a long-term supply shortage of sulfur could leave many more companies with little choice but to cut production or shut down.
“It’s not just about being willing to pay again,” said Kannan of the Colorado School of Mines, because “if the material isn’t available, how much can you do about it?”
