Fertiliser Supplies At Risk as Sulphuric Acid Imports Face Growing Challenges

Sulphur Availability Concerns Widen Cost Pressure for Sectors

Petrochemical supply chain disruptions are raising concerns over sulphur availability, a key component for sulphuric acid, which is a critical industrial input, adding a new layer of cost pressure for sectors such as fertilisers, metals, and construction.

The emerging risk reflects a second-order transmission of the Iran war, with the impact moving beyond crude oil and plastics into core industrial processes that depend on sulphur-derived inputs. China, a major global producer and supplier of sulphuric acid, has already begun tightening exports ahead of a planned halt from May, reducing availability in the global market.

A significant share of the sulphur used to produce sulphuric acid originates from refinery operations in West Asia and is transported through the Strait of Hormuz, which has been impaired by the Iranian war. Rising freight risks and insurance costs have introduced uncertainty in sulphur trade flows, with buyers becoming cautious about forward procurement.

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Sulphuric acid is used in fertiliser production, chemical processing, battery manufacturing, and metal treatment, linking the supply risk to multiple industrial value chains. It is widely used in cleaning and treating metals such as steel, copper, aluminium, and zinc. A disruption in its availability can directly affect production cycles and raise input costs across core sectors.

Key Statistics

The fertiliser sector is among the most exposed to a disruption in sulphur and sulphuric acid availability, given its central role in producing phosphate-based nutrients. India's fertiliser industry relies heavily on imported inputs, including sulphur and phosphate-based raw materials, making it vulnerable to global supply disruptions.

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India consumes over 9 million tonnes of phosphatic fertilisers annually, all sulphuric acid-dependent, and imports about 30 percent of its total fertiliser requirement, with West Asia supplying around 40 percent of these imports, highlighting structural dependence. Prices are already rising, with Middle East urea prices increasing by around 19 percent within a week, creating fresh cost pressures for agricultural sectors.

Sulphuric acid is also a critical input in battery manufacturing and recycling processes. Every tonne of lithium-ion battery cells manufactured requires sulphuric acid for electrode processing and electrolyte preparation, while recycling processes also consume significant quantities of it.

Industry insiders and experts are calling for strategic sulphur reserves to be built, accelerated captive acid generation through domestic smelting capacity, and integration of sulphuric acid security into the critical minerals and energy transition strategy.