Global fertiliser sector faces sulphur squeeze as miners bid up scarce supply

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Fertiliser faces sulphur squeeze

Highlights

Global sulphur prices surged from $100–$200 to nearly $1,000 a tonne in 2024 as Hormuz disruptions and China's sulphuric acid export ban squeezed supply.
Mining companies, buoyed by record copper prices and higher earnings like Antofagasta's nearly one-third increase, outbid fertiliser makers for sulphur inputs.
Fertiliser producers face margin pressure, output cuts, and risk of higher food prices in 2025 as OCP and Mosaic warn of unaffordable sulphur costs impacting crop yields.

Supply disruption reshapes sulphur demand

As reported by Financial Times, the shortage is emerging as miners and fertiliser producers compete for a commodity that is critical to both copper processing and phosphate fertiliser production. About half of global sulphur volumes passed through the Strait of Hormuz before the war involving Iran, and the blockage of the route has sharply reduced available supply.

Raghav Jain of commodities pricing agency Argus says the mining industry is winning the bidding war because higher metals prices are giving it more room to absorb the jump in input costs. Sulphur, which usually sells for $100 to $200 a tonne, is now trading near $1,000 a tonne this year, while China has also moved to ban exports of sulphuric acid, adding further pressure to the market.

Fertiliser makers are already cutting output as they struggle to pass higher costs on to farmers. Andy Jung, chief economist at U.S. fertiliser company Mosaic, says weaker farmer affordability is leaving producers with little choice but to slow production, a trend that he warns will eventually hit crop yields and lift food prices meaningfully.

Morocco's OCP, the world's largest phosphate exporter, warned last month that surging sulphur prices are weighing on its business because the added costs cannot easily be transferred to farmers. The company is shifting output toward fertilisers that require less sulphur and is also seeking alternative sources outside oil and gas byproducts.

Mining resilience adds pressure on agriculture

Mining groups are proving better placed to manage the sulphur shock because copper prices remain close to record highs, supported by strong demand from electronics, grids and other industrial uses. Chile's Antofagasta said in August that although sulphuric acid and diesel costs are rising, earnings for the first six months are still almost a third higher than a year earlier.

High acid prices are also benefiting copper smelters that produce sulphuric acid as a byproduct. Raman Randhawa, chief financial officer at Capstone Copper, says some companies are striking swap deals involving acid and mined copper to secure supply on better terms, underscoring how elevated copper prices are cushioning the sector against higher input costs.

For agriculture, the outlook remains difficult because the trade disruption is still expanding rather than easing. Data and analytics platform Kpler says vessels remain stuck around Hormuz as the Iran war continues, and market data manager Madeleine Overgaard says the supply squeeze reaches from industrial goods to food, with likely effects on bakery prices next year as crop yields depend on sulphur-based inputs.

Our earlier article on the diesel squeeze outlined how damage to refining capacity and wartime disruptions tied to Ukraine and Iran pushed diesel prices sharply higher, with knock-on effects for transport costs, production expenses and inflation. It also described how policy moves such as strategic stock releases and shifting export rules began reshaping fuel flows, while warning that politically driven interventions can fragment energy markets and weaken supply-chain resilience for smaller economies.

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