{"id":41978,"date":"2026-03-11T05:26:02","date_gmt":"2026-03-11T05:26:02","guid":{"rendered":"https:\/\/financialrush.com\/?p=41978"},"modified":"2026-03-11T05:26:02","modified_gmt":"2026-03-11T05:26:02","slug":"gulf-disruption-chokes-sulphur-flows-supporting-swaths-of-global-industry","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=41978","title":{"rendered":"Gulf disruption chokes sulphur flows supporting swaths of global industry"},"content":{"rendered":"
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A surge in the price of sulphur has highlighted how the effects of the Iran war are spreading far beyond energy markets to hit wider supply chains.<\/p>\n
Shipping has been virtually halted through the Strait of Hormuz, choking off supplies of the byproduct of oil and gas refining that, while a niche commodity, is vital in sectors from fertilisers and chemicals to computer chips and metal processing.<\/p>\n
The impact of the waterway\u2019s disruption is rippling across industries, with already strained supply chains facing their biggest threat since the Covid-19 pandemic, analysts say. <\/p>\n
More than 44,000 companies have had at least one shipment affected, according to analytics group Dun & Bradstreet, which said businesses in China and India had been the most exposed.<\/p>\n
Amin Nasser, chief executive of Saudi Aramco, told reporters on Tuesday that the crisis in the strait had triggered \u201ca severe chain reaction\u201d, with a \u201cdrastic domino effect\u201d on various industries.<\/p>\n
Sulphur crunch<\/span><\/h3>\n
The price of sulphur in China, the world\u2019s largest consumer, has jumped 15 per cent since the war began to hit a record Rmb4,650 ($672) a tonne this week, according to data from Argus.<\/p>\n
The surge has exposed the fragility of supply chains built around the Gulf, which accounts for 45 per cent of the world\u2019s sulphur exports, according to business intelligence group CRU.<\/p>\n<\/picture><\/figure>\n
Although some refineries outside the Middle East have sulphur to sell, the problem now is finding vessels to transport it, according to Clive Murray, chief executive of London Commodity Brokers.<\/p>\n
\u201cAt the moment it\u2019s dire. Last week we couldn\u2019t close any trades\u201d because vessels were unsure whether they would be able to get the fuel they needed, so it was impossible to book ships to transport cargoes including sulphur, he said.<\/p>\n
\u201cWe can\u2019t book freight\u2009.\u2009.\u2009.\u2009No one knows what to do,\u201d he added. <\/p>\n
One trader said the market for sulphur and sulphuric acid was \u201cvery choppy\u201d and that some companies were scrambling for near-term deliveries of acid to \u201cprolong\u201d their existing stockpiles of sulphur. <\/p>\n
A further restricting factor is that only some companies are able to transport and store the hazardous acid.<\/p>\n
Mining billionaire Robert Friedland said the disruption to sulphur supplies would have an impact on copper production in Africa, a big sulphur importer. <\/p>\n
\u201cThe cost of leaching copper oxide ore in the central African copperbelt is about to get even more expensive,\u201d he wrote in a post on X. <\/p>\n<\/picture>Workers treat copper cathodes in a plant in Tenke Fungurume Mine, in Democratic Republic of Congo<\/span> \u00a9 Emmet Livingstone\/AFP via Getty Images<\/span><\/figcaption><\/figure>\n
Microchips<\/span><\/h3>\n
As a highly energy-intensive industry, chipmakers were already facing a hit from surging oil and gas prices. But the world\u2019s biggest manufacturers, which include Taiwan\u2019s TSMC and South Korea\u2019s Samsung and SK Hynix, also rely on a range of chemicals that are transported through the strait.\u00a0<\/p>\n
Semiconductor companies use sulphuric acid to clean wafers and rely on helium, which is also heavily produced in the Gulf, to help cool them during manufacturing.<\/p>\n
The semiconductor industry accounts for about a fifth of global helium demand, according to consultancy TechInsights.<\/p>\n
\u201cAbout a third of the global helium supply is from Qatar, which is used in things like cooling and leak detection in chip fabs,\u201d said Mohammad Ahmad, chief executive of supply chain intelligence platform Z2Data.<\/p>\n
The cost of semiconductor components had already been rising in the past year, pressure that the latest supply crunch would \u201conly exacerbate\u201d, he added.<\/p>\n
Meanwhile, one of the world\u2019s largest sources of bromine \u2014 used in the etching of patterns on to silicon wafers \u2014 is the Dead Sea. A 2023 report from the Korea International Trade Association found that the country imported more than 99 per cent of its bromine from Israel.<\/p>\n<\/picture>A production line of silicon carbide wafers in Dongying, Shandong Province of China<\/span> \u00a9 Zhou Guangxue\/VCG via Getty Images<\/span><\/figcaption><\/figure>\n
Fertiliser<\/span><\/h3>\n
The fertiliser industry is the biggest user of sulphur, accounting for about 60 per cent of demand. A prolonged supply crunch will increase fears of global food shortages and soaring prices.<\/p>\n
Sulphur prices were already near historic highs before the war, partly driven by ballooning demand in China from metals markets.\u00a0<\/p>\n
Disruption to oil and gas production now threatens to curb output while the closure of the Strait of Hormuz is blocking exports from reaching global markets. <\/p>\n
The three largest importers \u2014 Morocco, China and Indonesia \u2014 all buy at least half of what they consume from the Middle East.\u00a0<\/p>\n
The crisis comes as peak fertiliser season approaches, with farmers in the northern hemisphere preparing to plant their crops. Scotiabank warned in a note on Monday of growing concerns that \u201cnear-term food security may be at risk\u201d.<\/p>\n
While alternative supplies exist, users were \u201ccompeting with everyone else trying to get hold of it\u201d, said Tom Price of Panmure Liberum.<\/p>\n
While metals manufacturers might be able to source alternative supplies, large fertiliser producers would struggle given the huge volumes they required, he said. \u201cYou might be managing 3 to 5 per cent of global supply if you\u2019re a major producer. You just can\u2019t find a substitute for that,\u201d Price added. <\/p>\n
Meanwhile the price of urea, another form of fertiliser, hit $700 a tonne this week, a 45 per cent jump from just before the war, according to Argus.<\/p>\n<\/picture>Workers fill bags with fertiliser in the Elephant Vert factory in Meknes, northern Morocco<\/span> \u00a9 Fadel Senna\/AFP via Getty Images<\/span><\/figcaption><\/figure>\n
Metals<\/span><\/h3>\n
Sulphuric acid is used in \u201cleaching\u201d, a way to separate and recover metals such as copper, nickel and uranium. Indonesia, the largest producer of nickel, relies heavily on sulphur imported from the Middle East.<\/p>\n
Chris Lawson of CRU said that while the sulphur shortage would initially hit the fertiliser industry, there would be an impact on \u201cthe copper and metal side of things\u2009.\u2009.\u2009. a bit further down the line\u201d.<\/p>\n
One expert at a global trading house said there was almost 3mn tonnes per year of copper production in the Democratic Republic of Congo that used sulphuric acid and was \u201cvulnerable\u201d to the ballooning disruption. That compares with global mined production of about 23mn tonnes in 2025.<\/p>\n
Brokers and analysts said copper refineries were likely to have stockpiles that would see them through several weeks, but not longer. With stocks starting to deplete \u201cthey\u2019re going to start scrambling to find other sources,\u201d said Murray of LCB.<\/p>\n
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