Key Highlights

  • Sulphur prices in China hit a record RMB4,650 ($672) per tonne, up 15% since the war began
  • The Gulf supplies 45% of global sulphur exports; the Hormuz shutdown has effectively choked that flow
  • Over 44,000 companies have had at least one shipment disrupted, with China and India most exposed
  • Fertiliser, microchips, copper, and nickel production all facing cascading shortfalls
  • Urea prices jumped 45% to $700 a tonne, raising fears over near-term food security
  • A third of global helium supply comes from Qatar, threatening semiconductor manufacturing

Beyond Oil: The Hidden Commodity Crisis

The world has been watching oil prices. A quieter crisis is unfolding beneath the surface. The closure of the Strait of Hormuz has choked off sulphur, a byproduct of oil and gas refining, and its absence is fracturing supply chains across some of the world's most critical industries.

Saudi Aramco CEO Amin Nasser warned of "a severe chain reaction" with "a drastic domino effect" spreading across industries. More than 44,000 companies have had at least one shipment affected, with China and India most exposed. Supply chains face their biggest threat since Covid-19, analysts say.

The Sulphur Crunch

The Gulf accounts for 45% of the world's sulphur exports. With shipping virtually halted, that supply has nowhere to go and global buyers cannot source alternatives at the volumes they need.

In China, the world's largest sulphur consumer, prices have jumped 15% since the war began to a record this week. The problem is not only availability but logistics. Clive Murray of London Commodity Brokers was direct: "At the moment it's dire. Last week we couldn't close any trades." Vessels are refusing bookings because they cannot guarantee fuel access to complete voyages. "We can't book freight. No one knows what to do," he said.

Some refineries outside the Middle East have sulphur to sell, but finding ships willing to carry hazardous cargo through a conflict zone is a separate problem. Traders describe the market as "very choppy," with buyers scrambling for near-term deliveries to extend existing stockpiles.

Fertilisers and Food Security

Fertiliser accounts for roughly 60% of global sulphur demand. The timing could hardly be worse: peak fertiliser season is approaching, with northern hemisphere farmers preparing to plant.

Morocco, China, and Indonesia, the three largest importers, each source more than half their supply from the Middle East. The volumes required are too large for most buyers to substitute quickly. Tom Price of Panmure Liberum said: "You might be managing 3 to 5% of global supply if you're a major producer. You just can't find a substitute."

Urea has hit $700 a tonne this week, a 45% jump from pre-war levels. Scotiabank warned that "near-term food security may be at risk."

Microchips and Helium

The semiconductor industry, already absorbing higher energy costs, now faces a second wave of disruption from chemical supply shortages. Chipmakers including TSMC, Samsung, and SK Hynix rely on sulphuric acid to clean silicon wafers.

They also depend on helium for cooling wafers, roughly a third of which is produced in Qatar. The semiconductor industry accounts for roughly a fifth of global helium demand. Mohammad Ahmad of Z2Data noted that semiconductor component costs had already been rising, a trend the current crunch would "only exacerbate."

Bromine, used to etch patterns onto wafers, adds another vulnerability: South Korea imports more than 99% of its bromine from Israel, a supply line now under severe strain.

Metals: Copper and Nickel in the Crosshairs

Sulphuric acid is central to leaching, the process for extracting copper, nickel, and uranium from ore. Indonesia, the world's largest nickel producer, imports heavily from the Middle East. In the DRC, nearly 3 million tonnes per year of copper production relies on sulphuric acid, against global mined output of about 23 million tonnes in 2025.

Mining billionaire Robert Friedland warned that copper leaching costs in the African copperbelt "are about to get even more expensive." Chris Lawson of CRU noted the fertiliser sector will feel the pain first, with metals following "a bit further down the line." Current stockpiles may last several weeks. After that, Murray of LCB said, "they're going to start scrambling."

Conclusion

The sulphur crisis reveals the true depth of the Hormuz disruption. Oil prices are the visible symptom. The damage running through fertilisers, food supply, semiconductors, and metals processing reveals a far deeper vulnerability. Supply chains built around the Gulf over decades cannot be rerouted in days or weeks. The longer the Strait stays closed, the deeper these cascading effects will cut. 

Frequently Asked Questions (FAQs)

  1. Why are sulphur supply chains being disrupted globally?
    Supply disruptions stem from the closure of the Strait of Hormuz, a critical shipping route through which a large share of global sulphur exports from the Gulf normally pass.
  2. Why is sulphur important for global industries?
    Sulphur is a key input for producing fertilisers, sulphuric acid, metals processing chemicals, and semiconductor manufacturing materials, making it essential for agriculture and industrial supply chains.
  3. How are fertiliser markets affected by the sulphur shortage?
    Sulphur is widely used in fertiliser production, and supply constraints have pushed urea prices sharply higher, raising concerns about rising agricultural input costs and potential food inflation.
  4. Why does the semiconductor industry rely on sulphur and helium?
    Chip manufacturers use sulphuric acid to clean silicon wafers and helium for cooling processes, meaning supply disruptions can increase production costs and delay semiconductor output.
  5. Which regions are most exposed to the sulphur supply shock?
    Large importers such as China, India, and several Southeast Asian economies are particularly exposed because they rely heavily on Middle Eastern sulphur exports for industrial production.