Sulphur exposes chokepoints in global production networks

share_windows This article appeared in East Asia Forum on July 11 2026.

When the Strait of Hormuz closed in late February 2026, the world focused on crude oil prices. Yet two months later, as the US–Israel war on Iran continued, a different casualty emerged: sulphur, which underpins both the global food system and the energy transition. The three chokepoints of geographic bottlenecks, by-product dependence and policy control all converged, turning a regional war into a global industrial shock.

Sulphur is the feedstock for sulphuric acid, the world’s largest-volume inorganic chemical and most widely used mineral acid. Sulphuric acid is essential to fertiliser production and clean-energy industries. It turns phosphate rock into usable nutrients, leaches nickel for batteries, extracts copper for grids and wiring, and processes lithium and rare earths needed for the energy transition. Nearly half of the world’s seaborne sulphur trade normally passes through the Strait of Hormuz.

What makes this more than a logistics problem is the nature of sulphur itself. It is rarely mined directly. Most global supply of sulphur is recovered as a by-product of natural gas and petroleum processing, and its price and availability are tied to demand for fuels. When supply tightens, there is no quick substitute or easy way to scale production.

Five Gulf states — Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Iran — produce about a quarter of global sulphur output and around half of seaborne trade. The Gulf produces sulphur because it sits on one of the world’s richest sour-hydrocarbon belts and must remove sulphur to commercialise its oil and gas. It has also become a major commercial export stream, supported by specialised granulation, storage and shipping infrastructure.

A shock came in May 2026 when China, the world’s largest sulphuric acid exporter, reportedly suspended standard-grade sulphuric acid exports to safeguard domestic availability. Sulphuric acid can be made by burning elemental sulphur, capturing smelter gases or roasting pyrite. In some uses, other acids can substitute. But these alternatives are usually more costly, require specialised facilities and logistics, or cannot be scaled in time to meet a sudden supply shock.

China is not self-sufficient in sulphur. It depends on imported solid sulphur, sulphur recovered from imported crude and a smaller domestic share from sour gas. About two-fifths is made by burning sulphur, while between one-third to two-fifths is recovered as a by-product of smelting copper and zinc concentrates. The remainder comes from domestically mined pyrite. In recent years, smelter by-product acid has risen to rival sulphur-burning as a source. But this partly shifts the vulnerability to imported copper and zinc concentrates.

When disruption in the Strait of Hormuz curtailed Gulf exports and forced cuts in some oil and gas operations, sulphur supply tightened at both the shipping and production levels. While there are alternative sulphur producers, they cannot instantly replace Gulf volumes or China’s flexible acid exports. Sulphuric acid requires specialised transport and storage and new acid capacity cannot be built quickly.

China’s sulphur export halt was primarily a domestic supply-security response, but it also had wider industrial effects. As fertiliser consumes most of China’s sulphuric acid, imported sulphur prices had spiked and redirecting exports helped shield capped domestic prices during the spring planting season. As battery materials become a growing source of acid demand, keeping low-cost acid at home also supports China’s battery and electric-vehicle competitiveness. The ban applied mainly to lower-end industrial and smelter acid, while high-purity, electronic-grade acid could still be exported by permit. The effect was to reserve lower-margin acid for domestic use while selling higher-value products abroad.

Chokepoint power is a form of monopoly, but state monopolies work differently from corporate ones. Companies seek excess returns, while states use chokepoint control to serve geopolitical and strategic ends, including long-term economic advantage. China’s acid ban is thus designed to outlast the Hormuz shock and sits alongside Beijing’s wider controls on rare earths, gallium, germanium, antimony and tungsten.

In implementing the ban, China gave up some export revenue, but sulphuric acid exports represented a small share of its much larger domestic acid market. The costs were more concentrated for overseas users dependent on imported acid, including Chilean copper leachers, Indonesian nickel processors and fertiliser producers. China’s leverage stemmed from its industrial scale, integrated downstream capacity and ability to redirect supply during a crisis.

In integrated global production networks, a shock can travel through hidden pathways. A blockade in the Gulf curtails Asian refining. A shortage of sulphur raises the cost of food supply and battery metals. Industries that see themselves as unrelated turn out to be connected by basic inputs they rarely consider. Industrial chemicals are the next frontier of supply-chain vulnerability because they sit even further upstream. The assumption that basic inputs would remain cheap, abundant and available on open markets is breaking down.

There is no easy fix. The task for governments is to build resilience without strangling the trade that makes resilience possible. Once security framing is unleashed, it tends to expand until all imported inputs are seen as vulnerabilities and trade restrictions are seen as the solution.