War in the Persian Gulf and New Chinese Export Restrictions have sent Sulfuric-Acid Prices Soaring and raised Concerns about the Availability of a Chemical that the World Relies on for Food, Metal, Paper, Computer Chips, and Clean Water. Sulfuric Acid is the most Consumed Chemical on the Planet, produced by Smelting and Refining Nonferrous Metals, such as Copper and Nickel, or by Burning Sulfur, a Byproduct of Oil-and-Gas Processing.
The Acid can Burn a Hole in a Steel Shelf at the Hardware Store, where it is Sold by the Bottle as Extra-Strength Drain Opener. But it is more prevalently used Higher Up the Supply Chain by Heavy Industry to make a Ubiquitous Array of Products and Materials. Sulfuric Acid is used to Produce Phosphate Fertilizers, Leach Copper, and Other Metals from Rock, Pulp Wood, Pickle Steel, Tan Leather and Vvulcanize Rubber. Municipal Water Treatment depends on Sulfuric Acid, as do Battery and Semiconductor Makers. The Citric Acid that Adds Tang to Sugary Drinks and the Silica that gives Toothpaste its Grit are made with it, too.
Because Sulfuric Acid is Highly Corrosive, it is Difficult and Expensive to move around, said Kunal Sinha, who Previously Managed the Sulfuric-Acid Business at Mining Firm Glencore and is Now Co-Founder and Chief Executive of Metals-Processing Startup Valor. Users don’t usually Keep much Ssulfuric Acid on Hand because it Requires Careful Handling and Special Tanks for Storage, Sinha said. “There’s only weeks, maybe if you’re lucky a month, planned for in their pipeline and storage,” He said. “Supply-chain disruption, whether it’s a rail strike or the Strait of Hormuz being closed, is a problem.”
A Large Chunk of the World’s Sulfur comes from Persian Gulf Oil Refineries and Gas Plants and has been Choked Off at the Strait. In turn, the Threat to Fertilizer Markets and Food Supply has Prompted China, the World’s Bbiggest Sulfur Producer to Restrict Exports this Month, Boosting Prices, and further Straining Availability, said Freda Gordon, Director at Acuity Commodities, which Tracks Sulfur Markets.
“They are really worried about food security,” Gordon said. “They want to make sure the fertilizer prices are stable.” The Markets likely to be Hardest Hit by Chinese Export Ccontrols are Chile and Indonesia, said Sarah Marlow, Head of Fertilizer Pricing at Argus.
Sulfur Prices in Indonesia were already Climbing when the U.S. and Israel began Bombing Iran and have since Risen more than 80%, according to Argus. Metals Executives say Nickel Miners there, who get most of their Sulfur from the Middle East, have Started to Dial Bback Production of the Metal that is used to make Electric-Vehicle Batteries and Stainless Steel.
Sulfuric-Acid Prices in Top Copper-Producer Chile, have more than Doubled since the Fighting began. Chile Imports more Sulfuric Acid than any other Country and uses it to Leach Copper from Huge Heaps of Ore. Key Export Prices in the Middle East and China, have also Surged. Analysts and Industry Advocates are Waving Warning Flags on Wall Street and in Washington.
“It’s getting to that critical point where inventories are being drawn down and production of critical minerals and agricultural products like phosphate, are slowing down,” said Craig Jorgenson, CEO of industry Group the Sulphur Institute.
The U.S. is relatively Insulated. Much of the Demand that isn’t Met by Oil Refineries and Domestic Smelters comes from Canada and Mexico, and where Sulfur has been Stockpiled in Huge Pyramids Near the Alberta Oil Sands during Periods of Low Prices. Overseas Sulfur Shortages could still Hit the U.S. Economy, Particularly if Global Copper Production Declines and Prices Climb beyond Today’s Record Highs.
The Biggest Data Centers each Require Tens of Thousands of Metric Tons of Copper for All the Wires, Busbars, Circuit Boards, Transformers and other Electrical Components inside. Houses are Filled with Copper Pipe and Wire. Even before Electric Cars, the Typical American Automobile contained more than a Mile of Copper Wiring. Refiners on the U.S. Gulf Coast that Process Sulfur Heavy Sour Crudes, such as those from Canada and Venezuela, have a Byproduct as in Demand as their Main Products Gasoline, Diesel, and Jet Fuel.
Mining Magnate Robert Friedland’s Ivanhoe Mines recently Opened Africa’s Largest Copper Smelter in the Democratic Republic of the Congo, a Top Copper Producer that Relies on Middle Eastern Acid. Friedland said when Ivanhoe Mines Reported Quarterly Results. that the Kamoa-Kakula Smelter was Generating about $1 million a Day from Surging Sulfuric-Acid Sales. Building an Efficient Selter that Produces more Acid Cost More, Friedland said in an Interview: “Now we get the payback.”
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