Latest developments on sulphuric acid

I spent this week in Santiago to visit with market participants following CESCO week to catch up on the latest developments. Last week's conversations were dominated by sulphuric acid, overtaking copper as the primary topic, following China's ban on sulphuric acid exports from May to December, as first reported by Acuity Commodities two weeks ago. 

Last year, China was the largest supplier to Chile, accounting for close to 1.5m t, or 37% of the the 4m t Chile imported. However, flows from China have already slowed this year due to China's export restrictions ahead of the full ban. As an indication, it is understood nine cargoes from China were received in Chile in 1Q, down from 18 in 1Q25. 

That being said, China was still expected to play a key role in supplying Chile this year, leaving the market looking for alternative supply to cover commitments and expected spot demand for 2H.

For now, the market remains well supplied, including high port inventories, leaving many consumers feeling comfortable for now. But, as we have maintained throughout the year, we expect notable spot demand in 2H, amounting to several hundred thousand tonnes.

In addition, sources point out they expect low tolerance on contracts, meaning volumes will be at the low end, typically 10% less than the base volume. This is expected to create further tightness, and it is understood as being implemented across the board on allocations to Chile.

The situation is also complicated by lower-than-expected supply from markets including Mexico and Peru. 

There remains some market chatter about Chile using its copper concentrate supply to China as leverage to secure supply, but no progress related to this has been heard.

While the path forward appears cloudy, FOB prices from markets that can supply, such as west coast India are firming. Ongoing firm sulphur prices is providing another layer of complexity and price support.