China is reportedly halting all exports of sulfuric acid starting in May 2026, a move that sends powerful ripples across global commodity markets.
This decision comes at a critical time. The primary catalyst is the ongoing conflict in the Middle East, which has led to the effective closure of the Strait of Hormuz. This is significant because the Middle East accounts for over 40% of the world's seaborne sulfur shipments, a key raw material for sulfuric acid. With this major trade artery choked off, global supply was already under immense pressure, causing prices to spike.
However, this isn't just a reaction to a geopolitical crisis; it's also a reflection of China's long-standing industrial policy. First, Beijing has a history of using export controls to ensure its domestic needs are met, especially for critical materials like fertilizers. In fact, China had already suspended phosphate fertilizer exports and reportedly set a restrictive quota for sulfuric acid in the first quarter of 2026. This latest move to a full halt is a logical, albeit more drastic, extension of that policy, aimed at securing enough acid for its own spring planting season and industrial uses.
Second, the economic incentives for China to hold onto its supply have grown. Collapsing processing fees for copper smelters (TC/RCs) have made selling byproducts like sulfuric acid more important for their profitability. When global acid prices are high, it becomes more attractive for Chinese producers to supply their domestic market rather than export.
The immediate impact will be felt most acutely in two key sectors. First is the copper industry in Chile, the world's largest producer. A significant portion of its copper is produced using an acid-intensive SX-EW process, and it has become heavily reliant on Chinese acid imports. Losing over a million tonnes of supply could jeopardize a substantial amount of its production. Second is Indonesia's rapidly growing nickel sector, which uses the HPAL method to process ore for electric vehicle batteries—another process that requires vast amounts of sulfuric acid. This supply squeeze threatens to raise costs for the entire energy transition supply chain.
Ultimately, this export ban acts as a powerful amplifier on an already strained market. It tightens the supply of essential inputs for both food (fertilizers) and green energy (copper, nickel), creating a clear risk of feeding into broader inflation.
- Sulfuric Acid (H2SO4): A highly corrosive mineral acid and one of the most important industrial chemicals, used extensively in fertilizer manufacturing, mineral processing, and oil refining.
- SX-EW (Solvent Extraction and Electrowinning): A two-stage hydrometallurgical process used to extract and purify copper from low-grade ores. It is highly dependent on sulfuric acid.
- HPAL (High-Pressure Acid Leach): A process used to extract nickel and cobalt from laterite ores, common in Indonesia. It requires large quantities of sulfuric acid to dissolve the ore under high pressure and temperature.