Why Is the Global Sulfuric Acid Supply Chain Under Pressure?
I explain why the global sulfuric acid supply chain matters, who actually consumes it, how it is produced as a byproduct, and why the EV battery boom is squeezing global supply.
Quick Answer
Sulfuric acid (H2SO4) is the single most produced industrial chemical in the world, and the global supply chain is currently tight because demand from fertiliser, copper mining and EV battery metals is rising faster than byproduct supply from smelters and oil refineries.
Roughly half of the world sulfuric acid goes into fertiliser, about a quarter into mining and metals, and a fast growing slice into lithium, nickel and cobalt refining for EV batteries.
Spot prices have stayed elevated through 2025 and 2026, and most forecasters expect the squeeze to last another three to five years.
Why Sulfuric Acid Matters
An old industrial economics rule of thumb says the chemical wealth of a country can be measured by its sulfuric acid consumption. It is the workhorse behind fertiliser, metals, batteries, refining, water treatment, detergents and pharmaceuticals.
If sulfuric acid supply tightens, the effects ripple into food prices, copper prices and EV battery costs within months.
Where the Demand Comes From
- Fertilisers (about 55 percent): mainly to make phosphoric acid, the base of all phosphate fertilisers (DAP, MAP, SSP).
- Mining and metals (about 20 percent): leaching copper, zinc, nickel and uranium ores.
- EV battery refining (fast growing): producing battery grade nickel sulfate, cobalt sulfate and lithium sulfate.
- Oil refining, chemicals, water treatment, paper (the remainder): a long tail of industrial uses.
How Sulfuric Acid Is Actually Produced
This is the part most people get wrong. The majority of the world sulfuric acid is not made on purpose. It is a captured byproduct of two other industries.
- Smelter acid: when copper, zinc, nickel and lead ores are smelted, sulfur dioxide is released. Environmental rules require that SO2 to be captured and converted to sulfuric acid rather than vented.
- Sulfur burning: elemental sulfur, recovered from oil and gas refining, is deliberately burned to produce SO2 and then converted to acid.
That byproduct nature is what makes the supply chain so fragile. You cannot just spin up new acid output without either a new smelter or a new sulfur burning plant, both of which take years to build.
The Logistics Problem
Sulfuric acid is dense, highly corrosive and dangerous to transport long distances. It moves by specialised rail tank cars, dedicated coastal vessels and lined pipelines, not in standard containers.
As a result the market is intensely regional. A surplus in Chile does not help a deficit in Morocco. Each region has its own balance, and local shortages can spike prices even when the global picture looks fine.
What Is Driving the Current Squeeze
Three pressures are stacking on top of each other.
First, the energy transition is reducing elemental sulfur output. As refineries process less crude and as gas plants tighten, less sulfur is recovered, which cuts feedstock for purpose built acid plants.
Second, smelter acid output is flat. Copper smelting is steady but not growing fast enough to cover demand, and new smelter projects in Indonesia and Africa have hit construction delays.
Third, EV battery metals refining has exploded. Producing one tonne of battery grade nickel sulfate consumes roughly 4 tonnes of sulfuric acid. Lithium and cobalt refining add even more demand.
What This Means for Prices
Spot prices for sulfuric acid through 2025 and into 2026 have traded well above the 50 USD per tonne pre 2022 baseline, in places clearing 200 USD per tonne CFR. Fertiliser producers, especially in Morocco, India and Brazil, have absorbed the highest costs.
That cost flows through into DAP and MAP fertiliser prices, which flow into farm input costs, which eventually reach grocery shelves.
How the Market Is Adjusting
- Mosaic, OCP and other major fertiliser players are investing in dedicated sulfur burning acid plants to decouple from smelter byproduct supply.
- Battery metal refiners in Indonesia and Australia are co locating acid plants on site.
- Long term contracts (3 to 5 years) are replacing spot purchases as buyers lock in security of supply over price.
- Recycling of spent acid from refineries and battery recycling is starting to scale, though still under 5 percent of demand.
The Takeaway
Sulfuric acid is the quietest critical commodity in the world. Most consumers will never see a litre of it, but they will feel its price every time they buy fertiliser, copper wire or an EV battery. The current squeeze is structural, not cyclical, and the next three to five years will see a wave of new on purpose acid plants come online to plug the gap. Until then, expect prices to stay high and contracts to stay tight.
Frequently Asked Questions
Who is the largest producer of sulfuric acid in the world?
China, by a wide margin, followed by the United States, Morocco and Russia.
Why is sulfuric acid so important for EV batteries?
Battery grade nickel, cobalt and lithium are refined through sulfate intermediates, and producing those sulfates consumes large volumes of high purity sulfuric acid.
Can sulfuric acid be recycled?
Yes. Spent acid from refineries and battery recycling can be regenerated, but recycled supply is still a small slice of the global market.