Metals leaching expected to increasingly drive sulfur demand growth through 2050

Heightened requirements for metals leaching are expected to become an increasingly salient factor propelling sulfur demand growth over the next two and a half decades, according to a recently published Sulfur Outlook report from S&P Global Commodity Insights analysts.

Sulfur is primarily consumed for fertilizer production, but the commodity can also be used to generate sulfuric acid, a key input in leaching metals such as nickel, copper and cobalt, which are crucial for the energy transition. The report projects that an increased global push for renewable energy, electrification, and battery storage will support a near doubling of sulfur demand for leaching in the coming decades, from about 13.4 million mt in 2023 to roughly 24.6 million mt in 2050. This shift will likely lead to growing markets in Asia, Oceania, and Africa.

In the agriculture sector separately, sulfur demand is projected to reach around 72 million mt by 2050, an increase of 60% from about 44.9 million mt in 2023, according to S&P data. The sector is expected to remain the dominant source of sulfur demand over this period, but the analysts anticipate it will face a slower rate of growth.

The analysts attributed this lower predicted growth rate to "slower expansions of agricultural land, increased use of precision application technology and fertilizer use efficiency." However, they also noted that regulations targeting reductions in emissions of sulfur dioxide -- an air pollutant produced from burning fossil fuels -- could also increase demand for sulfur-enhanced fertilizers.

At the same time, as green development spurs sulfur demand for the energy transition, it may also constrict supply. Sulfur is primarily derived as a by-product from fossil fuel refining. The Sulfur Outlook report anticipates that a future with "aggressive" public and private-sector action to tackle climate change could result in a global sulfur supply peak in 2028 -- even without reaching net-zero emissions by mid-century.

As demand from leaching increases, the analysts anticipate a flip from the current global sulfur surplus to a deficit. This deficit is expected to widen in the coming decades and elevate sulfur prices. By 2050, under the aggressive energy transition assumptions, the analysts project a potential additional supply shortfall of 30 million mt.

Platts, part of S&P Global Commodity Insights, assessed FOB Middle East sulfur (excluding Iran) at $74-$78/mt Feb. 29, up $1/mt on the week.