Market and product

Global sulfur prices have risen sharply over the past two years, highlighting growing instability in the supply of a critical raw material for the chemical industry. According to market analysts, the tightening sulfur market is not merely the result of recent geopolitical tensions but also reflects deeper structural changes in the global energy sector. These developments are raising concerns about the long-term availability of sulfuric acid, one of the most essential chemicals used across modern industry.

Sulfuric Acid: A Cornerstone of Modern Industry

Sulfuric acid is widely used throughout industrial manufacturing as a solvent, electrolyte, and catalyst. It is an indispensable input for the production of fertilizers, the extraction and refining of critical minerals such as copper, nickel, cobalt, and rare earth elements, as well as the manufacture of automotive batteries, anodized aluminum, nylon, paper, sugar, high-octane gasoline, pharmaceuticals, and numerous other chemical products.
Elemental sulfur is the primary feedstock for sulfuric acid production. For decades, most of the world's sulfur supply has been recovered during the refining of sulfur-rich crude oil and natural gas. As a result, the sulfur market has become closely tied to the fortunes of the oil and gas industry.

From an Oil and Gas Byproduct to a Strategic Commodity

Since the 1970s, increasingly stringent environmental regulations have required refineries to remove sulfur from crude oil and natural gas to reduce emissions responsible for acid rain. The recovered sulfur subsequently became the principal raw material for sulfuric acid production.

Today, more than 85% of the sulfur recovered from the oil and gas industry is used to manufacture sulfuric acid. Copper and zinc smelters also generate sulfuric acid as a byproduct of metallurgical processes. Nevertheless, most fertilizer, chemical, and metal producers manufacture sulfuric acid on-site using sulfur purchased from oil and gas companies, rather than buying sulfuric acid directly from the market. This practice reflects the highly corrosive nature of sulfuric acid and the significant costs associated with transporting it.

Before sulfur recovery from petroleum refining became widespread, elemental sulfur was extracted directly from underground deposits using the Frasch process. However, the technology suffered from low recovery rates, high water consumption, and expensive operating costs, and it has now been largely phased out worldwide.

According to sulfur recovery engineer Angie Slavins, even reviving Frasch mining would not be sufficient to satisfy today's demand. At its peak in the 1970s, global sulfur production from the Frasch process reached only about 10 million metric tons annually. By comparison, worldwide sulfur production today stands at approximately 72–80 million metric tons per year and continues to grow.

The Sulfur Market Enters a Structural Supply Deficit

Industry experts believe that the global sulfur market had already entered a structural supply deficit by early 2026, well before geopolitical tensions in the Middle East disrupted shipping through the Strait of Hormuz.

One of the primary drivers has been the rapid expansion of Indonesia's nickel industry. Backed by substantial Chinese investment, Indonesia has significantly increased its nickel processing capacity using acid leaching technology, which relies heavily on sulfuric acid. As a result, the country now imports more than 5 million metric tons of sulfur annually—equivalent to roughly 13% of globally traded sulfur.

At the same time, supply has come under increasing pressure following Russia's sulfur export ban introduced in late 2025. Subsequent disruptions to shipping through the Strait of Hormuz further tightened an already constrained market.
According to market data, approximately half of the sulfur traded internationally each year originates from sulfur-rich crude oil processed in countries that export through the Strait of Hormuz. Any disruption to shipping through this strategic waterway can therefore significantly reduce global sulfur supply, driving prices even higher.

In addition to Russia, Türkiye has imposed restrictions on sulfur exports, while India is considering measures to secure supplies for its domestic fertilizer industry. China, which consumes virtually all of its domestically produced elemental sulfur and is the world's largest supplier of merchant sulfuric acid, has also suspended sulfuric acid exports. The move is expected to have a significant impact on Chile's copper industry, one of China's key trading partners.

Impacts Across Multiple Industries

Rising sulfur prices and export restrictions are placing growing pressure on industries that rely heavily on sulfuric acid. Several major fertilizer, copper, and nickel producers around the world have already announced production cutbacks as raw material costs continue to rise and supply becomes increasingly uncertain.

The consequences could extend well beyond these sectors. Sulfuric acid plays a vital role in extracting and refining many of the metals needed for electric vehicle batteries, renewable energy technologies, and other clean energy applications. It is also a key input in fertilizer manufacturing, meaning prolonged volatility in the sulfur market could eventually increase agricultural production costs and affect food supply chains.

A Long-Term Challenge in the Energy Transition

Even if geopolitical tensions ease and shipping through the Strait of Hormuz returns to normal, industry experts believe the sulfur market will continue to face long-term structural challenges.

Unlike many mineral commodities, sulfur production cannot be rapidly expanded in response to higher prices because it is produced primarily as a byproduct of oil and gas processing. As countries accelerate decarbonization efforts and gradually reduce their dependence on fossil fuels, sulfur recovery from the petroleum industry may also decline over the long term.

Some analysts have suggested that governments should begin establishing strategic sulfur stockpiles to reduce the risk of future supply disruptions. Canada is among the few countries that have already accumulated substantial sulfur reserves, with nearly 10 million metric tons recovered from Alberta's oil sands stored for future use. Many other countries, however, lack domestic sources of sulfur-rich crude oil and may need to explore alternative strategies to secure feedstocks for sulfuric acid production.

Recent developments suggest that sulfur is no longer merely a byproduct of the petroleum industry. Instead, it is increasingly emerging as a strategic industrial resource that underpins a wide range of global supply chains. Ensuring a stable supply of sulfur and sulfuric acid is therefore expected to become an increasingly important priority for the chemical, metallurgical, energy, and agricultural sectors in the years ahead.