Bullish sentiment in the sulphuric acid market has intensified amid the suspension of all Chinese sulphuric acid exports from May through the end of the year. Although no formal announcement has been issued by government authorities, smelters are reportedly preparing to implement the measure. The potential halt would follow the quota system imposed for January-April, which capped exports for the period at 700,000 tonnes – just over half the volume shipped during the same period last year. Both the quota and the anticipated suspension are designed to protect domestic supply.
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Sulphuric acid prices are already nearing new records
A withdrawal of Chinese exports adds substantial pressure to a global market where supply is already tight. Prices have been on an upward trajectory since 2025 Q4 and are now at their highest levels since 2022. Multiple factors have contributed to this rally, namely renewed demand from major consumers, constrained availability from key exporting regions, and elevated sulphur prices. More recently, the escalation of conflict in the Middle East has driven freight rates sharply higher, pushing up landed costs in major import markets. Delivered prices into Chile have climbed from $175/t in late December 2025 to $270/t by mid‑April 2026, an increase of nearly 54%.
The bullish tone has been reinforced by rising domestic sulphuric acid prices in China. Local values increased from an average of $161/t in late February to $214/t in March. Regional trends remain mixed: prices in central provinces – including the major smelting hubs of Hubei, Anhui, and Jiangxi – averaged $157/t in March, while eastern regions rebounded to $194/t, reflecting elevated sulphur costs.
China exports have boomed over the past decade
China’s exit from the export market is set to be highly disruptive. China increased annual acid exports to 4.6 Mt in 2025 in response to global supply disruption. Chinese cargoes have consistently filled a structural gap in global supply over the past several years. The loss of these volumes will tighten availability even further, with limited scope for other origins to compensate.
There are limited alternative exporters with room to increase supply. Japan and South Korea were the largest exporters before China’s acceleration, and will be looking to capitalise on the opportunity, as will exporters in Western Europe. However, gains from both regions will be marginal – the gap left by China cannot be filled. The adjustment to the supply removal will need to come from through cuts in demand and a redistribution of import flows.
How can trade flows adjust?
Following the export announcement, CRU has assessed a potential scenario for 2026 exports where China is expected to reduce exports by around 2.8 Mt for the year. Additional supply from other exporters will only partially offset this loss: India, South Korea, and Japan could collectively increase exports by just 0.5 Mt. Europe also has some possibility for additional export volume if local acid demand slows due to elevated costs.
The sharpest contraction on imports will come from Saudi Arabia. The country is already facing severe logistical challenges linked to the Middle East conflict, with cargoes originally destined for the country rerouted. India and Indonesia are also likely to reduce import requirements due to increased domestic smelter supply and weaker affordability. In both markets, smelter acid supply is set to increase as Adani’s copper operations ramp up in India and Freeport’s smelter returns to operations in Indonesia.
There also remains scope for Chile, the largest importer of sulphuric acid, to adjust consumption lower. However, this market has the greatest ability to cover higher costs. CRU expects buyers to try to secure remaining requirements, with much of the country’s total import requirement covered under existing contracts. Chilean buyers have greater flexibility than many peers to source material from alternative origins, including Europe. Importers had already pivoted away from China in 2026 Q1, with Europe contributing a larger share of Chile's imports at China’s expense.
