Huatai Securities: Decline in oil and gas processing volume leads to sulfur supply gap, impacting the chemical and metal industries from multiple angles

Huatai Securities research report states that approximately 60% of global sulfuric acid comes from sulfur, 30% from by-products of metal smelting, and 10% from sulfur iron ore for acid production, while crude oil refining and natural gas processing by-products are the main sources of global sulfur production. According to Kepler, by 2025, nearly half of the sulfur exported through the Strait of Hormuz will come from global supplies, combined with the expectation of decreased refinery loads in East Asia due to limited crude oil supply, and the sulfur content in North American shale oil and gas is relatively low. After the reduction of sulfur supply from the Middle East, the global supply gap becomes more apparent. Huatai Securities believes that the sulfur supply and demand contradiction may be difficult to reverse in the medium term. According to S&P Global, about 58% of global sulfuric acid is used for phosphate fertilizers, with the rest including processing of metals such as nickel, copper, uranium, as well as manufacturing of titanium dioxide, nylon, dyes, and lithium battery cathodes. As sulfur supply tightens and prices remain high, chemical projects with differentiated production routes such as gypsum acid production, ferrous oxalate for iron phosphate, and chloride process titanium dioxide are expected to benefit. (People’s Financial News)