Entering the second quarter of 2026, the global copper market is caught in a multi-dimensional tug-of-war among macro tightening, geopolitical disruptions, and a fundamentally tight supply-demand balance. According to recent sources, China plans to fully suspend exports of copper and zinc by-product sulfuric acid starting in May, with only electronic-grade sulfuric acid exempted.
The ban may remain in effect throughout the year. As the world's largest producer and exporter of sulfuric acid, China's move directly targets the core of the global copper supply chain. Coupled with the concurrent pressures of spring agricultural season stockpiling, sulfur shortages, smelter maintenance, and peak demand season, copper prices are experiencing heightened short-term volatility. Meanwhile, the medium-to-long-term logic of cost support and supply contraction continues to strengthen, keeping both SHFE copper and LME copper in a strong upward trend.
Supply: sulfuric acid shortage, or cutting off 8% of the world's mineral copper
In the copper smelting process, there is a raw material that may seem peripheral but is in fact critically important: sulfuric acid.
In the hydrometallurgical (SX-EW) copper production process, producing just one ton of copper requires 3 to 4 tons of sulfuric acid. This reliance makes sulfuric acid the literal lifeline of the industry - and that lifeline is now under threat.
Take the Democratic Republic of Congo (DRC), for example: 83% of its copper output comes from hydrometallurgy. In Chile, that figure stands at 21%. Together, the two countries account for 16.9% of global mined copper through their wet smelting operations. In short, without sulfuric acid, a significant chunk of the world's copper production grinds to a halt.
So what's happening to sulfuric acid supply? The culprit is the ongoing conflict in the Middle East.
Global sulfur production in 2025 reached approximately 84 million tons, with Saudi Arabia, the UAE, Qatar, Iran, and Kuwait collectively accounting for about 24% of that total. Sulfur is a byproduct of oil and gas refining, and the Middle East conflict has severely disrupted transport through the Strait of Hormuz, while damaging oil and gas facilities that cannot be quickly restored.
As of April 24, 2026, the ripple effects are evident in sulfur spot prices:
| Region | Price Increase (vs. end of 2025) |
|---|---|
| Brazil | +72% |
| India | +47% |
| North Africa | +81% |
In the DRC, the situation is even more extreme. Factory-gate prices have reached:
- $1,500–2,300 per ton for sulfur
- $1,000–1,400 per ton for sulfuric acid
To put this into perspective: at a sulfuric acid price of 1,200/ton∗∗andacopperpriceof∗∗1,200/ton∗∗andacopperpriceof∗∗13,289/ton, the cost of acid alone now accounts for 32% of the copper price. According to SMM data from April 2026, sulfuric acid represents 25% of production costs for hydrometallurgical mines in the DRC that purchase their ore - and as much as 42% for mines that rely on their own ore.
Sulfur sulfuric acid copper chain conduction, overall cost curve shifts upward
China's dependence on sulfur imports has reached 65% -70%. Due to supply disruptions in the Middle East and the urgent need for spring plowing, domestic sulfur prices have exceeded 6200 yuan/ton, an increase of over 51% compared to before the Spring Festival. As the downstream core of sulfur, sulfuric acid prices have skyrocketed simultaneously, and the price difference between domestic and foreign markets continues to widen. For the global copper market, the cost of wet copper refining has directly increased by more than 50%.
Although pyrometallurgical copper refining benefits from the by-product sulfuric acid, the procurement cost of copper ore continues to rise due to the shortage of concentrate. Overall, the global copper production cost curve has shifted upward, and low-priced production capacity is gradually being cleared, providing strong support for copper prices.
Multiple constraints are superimposed, and copper mines and refined copper are tightened synchronously
The global copper mine supply bottleneck has become prominent, with Chile's production in February falling 4.8% year-on-year to a 9-year low, and Peru delaying project production due to social unrest. The processing fee for copper concentrate continues to decline, with spot TC falling to around -70 US dollars, reflecting extreme tension in the mining industry. Domestically, the spring maintenance of smelters combined with the demand for sulfuric acid to ensure supply has led to a reduction in refined copper production, and the supply gap of electrolytic copper in China gradually widened in April.
Inventories continue to draw down, highlighting a tight balance
Inventory is a direct reflection of the supply-demand relationship. As of last week, the domestic copper social inventory has dropped to around 320000 tons, a decrease of about 44% from the high point of the year. The rapid destocking for several weeks has greatly weakened the buffering effect of inventory. After the implementation of the sulfuric acid ban, market concerns about supply contraction have intensified, and downstream willingness to replenish inventory has increased, which may further lead to inventory depletion, and the tight balance of spot goods is expected to strengthen.
In the short term, copper prices are expected to maintain high volatility. The expectation of a Fed interest rate cut has been postponed, and the strengthening of the US dollar has brought temporary pressure. The supply shock of the sulfuric acid ban has a 3-6 month transmission lag, coupled with high sulfur copper inventories and downstream high price acceptance tests, making it difficult for copper prices to rise unilaterally.
However, strong support is formed by domestic spring plowing to ensure supply, smelting maintenance, low inventory, and peak demand season, and the downward adjustment space may be limited. In the medium to long term, the upward trend of copper prices is relatively clear. The sulfuric acid ban may continue until 2026, and the global reduction in wet copper production will gradually be realized. The bottleneck of copper mine supply is difficult to solve, and the contraction of refined copper supply will become the norm.
On the cost side, the price of sulfur sulfuric acid is running at a high level, and the copper production cost curve continues to move upward. On the demand side, the transformation of new energy and the strengthening of infrastructure support long-term consumption, and the supply-demand gap in the global copper market may expand to over 450000 tons. The ban on China's sulfuric acid exports this time is not only a short-term measure to ensure domestic food security, but also an important signal for the restructuring of the global industrial chain. Under the dual drive of new energy transformation and supply chain security, the scarcity of copper as a strategic metal continues to be highlighted, and short-term fluctuations do not change the bullish pattern in the medium and long term.
