The shutdown of maritime routes through the Strait of Hormuz is triggering shockwaves that extend far beyond traditional energy commodities, exposing severe vulnerabilities in raw material supply chains.
Beyond oil and gas, the Persian Gulf region is a powerhouse for petrochemical byproducts vital to heavy industry. Sulfur—a byproduct of oil and gas processing—is converted into sulfuric acid, a cornerstone chemical required for heap leaching and electrowinning. These processes account for up to 20% of the world’s refined copper output. With the Gulf accounting for nearly 25% of global sulfur supply and half of seaborne acid trade, supply disruptions combined with China’s export ban have crippled downstream markets.
Key Drivers of the Crisis:
- Skyrocketing Costs: Global sulfur benchmarks have broken records, soaring past $1,200 per metric ton according to industry reports.
- Logistical Deadlock: Due to its highly corrosive nature, shifting large volumes of sulfuric acid to overland transport networks is economically and practically unfeasible.
- Regional Impacts:
- Chile: As the world’s leading acid importer, Chile saw local prices double to $380/t in just seven weeks, driving a 6% drop in Q1 2026 copper output to 1.21 million tons and threatening long-term targets of 5.54 million tons by 2034.
- DRC and Zambia: African producers, reliant on the acid for 50–60% of their operations, are facing astronomical prices reaching $1,000–$1,400 per ton.
- Macro Outlook: The International Copper Study Group (ICSG) has downgraded its 2026 global production growth forecast from 2.3% to 1.6%.
