Iran war hits China’s sulphur imports as economic fallout from conflict grows
Supplies of sulphur – a key fertiliser ingredient – are tightening in China just as the spring planting season begins
The escalating conflict in the Middle East is having a direct impact on China’s access to sulphur – a raw material for producing fertiliser – just as the country enters its vital spring planting season.
China relies on imports for 47 per cent of its sulphur supply, according to a December report by Guosen Securities. More than half of those imports come from six Persian Gulf nations, which ship goods through the Strait of Hormuz to reach international markets.
But Iran has declared the waterway closed to commercial shipping amid its war with the United States and Israel, sending freight costs soaring.
Allan Pickett, executive director for fertilisers research at S&P Global Energy, said the price of fertiliser delivered in mainland China averaged US$520 in January and February. Prices were already rising as one of the northern hemisphere’s main planting seasons began, and shipping disruptions in the Strait of Hormuz could drive them even higher, he added.
“The domestic producers will have been building inventories for the spring application season, and therefore any further increases in sulphur prices or shortages of sulphur will not impact the entire spring application availability of phosphate fertilisers,” Pickett said.
“But it may impact some of the production, and it is likely to put further upwards pressure on Chinese domestic prices.”