Fertiliser stocks including Coromandel International, Paradeep Phosphates, Chambal Fertilisers, Gujarat State Fertilizers & Chemicals (GSFC), Rashtriya Chemicals & Fertilisers (RCF), and Fertilisers and Chemicals Travancore (FACT) are in focus after China moved to halt sulphuric acid exports from May. This comes at a time when global supply chains are already strained due to geopolitical tensions, raising concerns over input cost inflation for Indian players.
China's move to curb exports of sulphuric acid, particularly the by-product from copper and zinc smelting, is a shift toward domestic prioritisation ahead of its peak crop planting season. Producers and large buyers have reportedly been informally notified about this move. The restriction is expected to tighten global availability of sulphuric acid, a key industrial chemical, exacerbating an already constrained market.
The situation is further aggravated by disruptions in sulphur supply linked to the Iran conflict. The effective closure of the Strait of Hormuz has choked shipments from the Middle East, which accounts for nearly one-third of global sulphur production.
Sulphur is a critical raw material used to produce sulphuric acid, making the current supply shock a double blow for industries reliant on it.
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Why Sulphuric Acid Matters
Sulphuric acid plays a crucial role in phosphate fertiliser production and is also widely used in metal extraction processes such as copper refining. Any sustained increase in prices directly impacts fertiliser manufacturers' cost structures. With both raw material availability and logistics under strain, global prices of sulphuric acid have already been trending higher since the onset of the conflict.
For Indian fertiliser companies, rising input costs could squeeze margins, especially if price increases cannot be fully passed on to farmers due to regulatory and subsidy constraints. India imported around $118 million worth of sulphuric acid in 2024, highlighting its dependence on global markets. A sustained supply crunch could therefore translate into higher working capital requirements and earnings pressure.
Beyond fertilisers, the supply squeeze is also expected to impact copper producers globally, particularly in regions like Chile, the Democratic Republic of Congo, and Zambia.
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