The Waste Product That Half the World Food Supply Depends On
Sulphur is removed from oil and gas because regulations require it, producing an enormous supply nobody set out to create. It then becomes sulphuric acid, which becomes phosphate fertiliser and battery metals.
Nobody Produces It Deliberately
Sulphur occurs in crude oil and natural gas. Burning fuels containing it produces sulphur dioxide, which causes acid rain and respiratory harm, so regulations progressively required it to be removed.
Refineries and gas processing plants therefore strip sulphur out as a matter of compliance. The recovered elemental sulphur is a byproduct they must dispose of.
Essentially all commercial sulphur now arises this way. Mining sulphur deliberately, which was historically done, has almost entirely ceased because recovered supply is cheaper and unavoidable.
What It Becomes
Roughly ninety percent of sulphur is converted to sulphuric acid, which is among the most widely produced industrial chemicals in the world and is used as a reagent rather than as an ingredient in most applications.
| Use | Share of Demand |
|---|---|
| Phosphate fertiliser production | Largest single use |
| Metal leaching, including copper and nickel | Growing |
| Industrial chemicals and refining | Significant |
| Everything else | Fragmented |
The phosphate connection is the important one. Producing phosphate fertiliser requires reacting phosphate rock with sulphuric acid, and there is no practical substitute at scale.
That means a substantial share of global food production depends on a waste stream from oil refining, which is not an arrangement anybody designed.
Supply is determined by how much oil and gas is processed and how sour it is. Demand is determined by fertiliser and mining. The two have nothing to do with each other, which is why the price does things neither industry expects.
The Supply Side Nobody Controls
Because production is compliance driven, no producer adjusts output in response to price.
A refinery does not process less crude because sulphur is cheap, and it does not process more because sulphur is expensive. Output follows refining volumes and the sulphur content of the crude slate, which follows entirely different economics.
Sour gas processing is a further source, and large gas projects in the Middle East and Central Asia produce enormous quantities of sulphur as an unavoidable consequence of the gas they were built for.
The consequence is a supply curve that is close to vertical. Price signals produce no supply response at all.
The Storage Problem
Because supply is unresponsive and demand fluctuates, producers accumulate inventory, and sulphur is stored in a distinctive way.
Molten sulphur is poured into enormous blocks, sometimes covering hectares and standing many metres high, which are then cut and shipped when a market exists.
Those blocks represent supply that will eventually reach the market regardless of price, which caps rallies. A price rise makes it economic to break up and transport a block that was previously not worth moving.
The reverse is also true. When prices are very low, producers pay to dispose of sulphur rather than earning from it, and the price has periodically gone negative in landlocked locations where transport cost exceeds any achievable sale price.
The Price Behaviour
The combination of inelastic supply and inelastic short run demand produces extreme volatility, and the price has moved by multiples within single years.
The drivers are recognisable. Fertiliser demand shifts with crop prices, which shift with weather and trade policy. Mining demand shifts with metal prices and with the mix of ore types being processed, since leaching intensive ores consume far more acid. Refining volumes shift with fuel demand.
None of those is connected to the others, and any of them can move the price sharply.
The Structural Question
The energy transition raises a genuine issue that receives little attention.
If refining volumes decline as transport electrifies, sulphur supply declines with them. Meanwhile demand from metal leaching rises, because battery metals including nickel and cobalt are frequently processed using sulphuric acid, and phosphate demand continues.
That points toward a structurally tighter market, and possibly toward the return of deliberate sulphur production, which would be an unusual reversal for a commodity that became a waste product decades ago.
Whether that occurs depends on the pace of refining decline against the growth in leaching demand, and both are uncertain enough that the direction is clearer than the timing.
The Bottom Line
Sulphur is produced because environmental regulation requires removing it from fuels, not because anybody wants it, and it becomes the acid that makes phosphate fertiliser and processes battery metals. Supply responds to refining decisions rather than to price, demand responds to agriculture and mining, and the disconnection between them produces violent price moves and occasional negative prices. The energy transition points toward tightening a market that has spent decades in structural surplus, which is a reversal nobody in either industry has planned for.