When news of the turmoil in the Middle East dominates the headlines, people's attention is often focused on oil prices. But this crisis is revealing a more hidden truth: the congestion in the Strait of Hormuz is becoming a breaking point for the "invisible lifeline" of global key metal processing. Sulfur, a raw - material overlooked by the industry, is pushing the shortage of sulfuric acid to the center of the storm, threatening the stable supply of metals such as nickel, copper, and cobalt. This is not only about minerals, but also about food security and the foundation of the energy transition.

1, Sulfur: The Invisible Cornerstone of Metal Processing

Sulfuric acid is one of the most basic chemicals in industry and is used in leaching, the core process of hydrometallurgy. Simply put, it treats crushed ores with acid to dissolve metals such as copper, nickel, and cobalt, enabling the economical extraction of low-grade ores. Without sulfuric acid, approximately 30% of global nickel processing, 50% of copper processing, and 70% of cobalt processing would come to a standstill.

And the source of sulfuric acid is sulfur. Twenty-four percent of the world's sulfur production (approximately 83.87 million tons) comes from the Middle East, with 50% of its maritime trade having to be exported through the Strait of Hormuz. More crucially, Indonesia, which accounts for over 60% of the world's nickel production (75% of global nickel ore mining), relies on the Middle East for 75% of its sulfur imports. The inventory of HPAL (High-Pressure Acid Leaching) plants can only last for 1-2 months; once supply is disrupted, nickel production will immediately "run out of food.

2, The "Breakage of One Link" in the Fragile Supply Chain

Before the conflict, the price of sulfur had already soared by 500% from its low in 2021, reaching $500 per ton. Under the latest situation, the price has risen by another 10%-15%. The congestion in the Strait of Hormuz (with oil tanker traffic reduced by 90%) has worsened the already tense market.

Panoramic View of Metal Exposure Risks:

Nickel: Indonesia's HPAL production capacity is highly dependent on sulfur from the Middle East. A shortage of inventories will directly impact 60% of the global nickel supply. Although nickel is often described as "abundant", its growth is essentially a product of acid-intensive processing, and the bottleneck only becomes exposed when demand surges.

Copper and cobalt: The Central African Copperbelt imports 2 million tons of sulfur annually (90% from the Middle East) for copper oxide leaching. The Democratic Republic of the Congo accounts for 70% of global cobalt mining, and its sulfuric acid supply is also hanging by a thread. Robert Friedland, founder of Ivanhoe Mines, bluntly stated: "If the interruption lasts more than 3 weeks, copper oxide mines will be shut down due to acid depletion.

Uranium, rare earths, and lithium: These industries rely on sulfuric acid leaching. However, China's rare earths are relatively safe due to its own production capacity, while Australia's lithium depends on sulfur from Canada (with the second largest source being Qatar), resulting in a slightly lower risk.

Other metals: The processing of zinc, manganese, etc. has been affected, but mining enterprises with their own sulfuric acid plants (such as those recovering sulfur from smelting waste gas) are more resilient.

3, Why can't it be replaced quickly?

The vulnerability of the sulfuric acid supply chain lies in the "three difficulties": first, physical constraints. Acidic substances are bulky and highly corrosive, making long-distance transportation costly and preventing rapid deployment like that of oil. Second, production capacity bottlenecks. The construction of a new sulfuric acid plant takes 2-3 years, and redirecting sulfur flows takes several months. Third, market structure. Sixty percent of global sulfuric acid is used in fertilizers, competing with the metal industry for raw materials. Shortages will simultaneously drive up metal costs and agricultural product prices, exacerbating food security risks. This makes it impossible to curb prices – although oil prices have fallen due to policy interventions, sulfur prices continue to rise, exposing the ineffectiveness of price suppression measures.

4, A deeper crisis will spread from metals to food

The disruption of the Strait of Hormuz is far from being a problem confined to a single industry. When metal processing comes to a halt due to a shortage of acid, mining companies will cut their investments, which will affect the supply of raw materials for electric vehicles and renewable energy. At the same time, fertilizer shortages will drive up food costs – 60% of the world's sulfuric acid is used in chemical fertilizers, and the shortage may reduce crop yields, creating a dual impact of "metal shortages + food crises".

5, Breaking the Deadlock: From Passive to Active

Faced with this "single-point failure" risk (about 25% of the world's sulfur production is affected by the Strait of Hormuz), the industry needs to respond in three steps: first, inventory upgrading. Mining enterprises should increase sulfur reserves to 3-6 months to avoid "food shortage" in HPAL plants. Second, supply chain diversification. Develop new sulfur sources such as the Gulf of Mexico and Russia to reduce dependence on the Middle East. Third, technological self-sufficiency. Invest in sulfur recovery from smelting waste gas (such as the self-produced acid system of the Kamoa-Kakula copper mine) to transform sulfuric acid from "import dependence" to "endogenous capacity".

At this point, the critical minerals that have long been overlooked will step into the spotlight. The congestion in the Strait of Hormuz is elevating sulfuric acid from an "industrial by-product" to the stage of "critical minerals." It is not just a metaphor for the oil market, but the ultimate lifeline of the metal supply chain. While the world focuses on oil prices, this hidden crisis is quietly reshaping the metal landscape. The supply elasticity of nickel, the processing costs of copper, and even the new energy transformation of cobalt will all be shaken by a shortage of sulfuric acid.

Investors need to reassess the vulnerability of metal supply chains, and policymakers should include sulfuric acid in critical mineral strategies. Otherwise, metal shortages will spread like a domino effect – from electric vehicle batteries to agricultural fertilizers, the breakdown of each piece could plunge the global industrial chain into a deeper winter.

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