{"id":77223,"date":"2026-04-22T00:10:24","date_gmt":"2026-04-22T00:10:24","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/77223\/"},"modified":"2026-04-22T00:10:24","modified_gmt":"2026-04-22T00:10:24","slug":"the-hormuz-closure-is-driving-a-shortage-of-battery-ingredients","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/77223\/","title":{"rendered":"The Hormuz Closure Is Driving a Shortage of Battery Ingredients"},"content":{"rendered":"

The energy impacts of the continued crisis in the Persian Gulf are obvious<\/a>. Countries that rely on the natural gas and oil from the region are dealing with higher prices, and in some cases are trying to tamp down their demand for fuel and electricity to keep prices under control, not to mention maintain basic energy availability.<\/p>\n

But it\u2019s not just gas-fired power plants and internal combustion engines that are feeling the pinch. <\/p>\n

The consequences of the effective closure of the Strait of Hormuz go well beyond the set of energy commodities typically associated with the Persian Gulf, including a vast array of minerals and petrochemicals, including many necessary to produce clean energy. We\u2019ve already covered aluminum<\/a>, a key component of solar panels, cars, and batteries, which requires so much energy for processing that almost 10% of it is produced in the Middle East, where fuel is abundant. <\/p>\n

Now another chemical essential to the battery supply chain is seeing price hikes and supply reductions: sulfuric acid.<\/p>\n

Sulfuric acid is used in refining and processing several metals and minerals key to the energy transition, including copper, cobalt, nickel, and lithium. Copper is used throughout EVs and other clean technologies, while nickel and cobalt are used in cathodes in lithium-ion batteries \u2014 which, of course, also contain lithium. Shortages or higher prices of sulfuric acid could lead to shortages or higher prices for batteries and electric vehicles, just as consumers flock to them to help mitigate the impacts of rising fossil fuel costs. <\/p>\n

Sulfur is a byproduct of oil and natural gas refining, hence about half of seaborne sulfur comes from the Middle East, according to Argus Media<\/a>, but only a handful of sulfur-bearing vessels<\/a> have transited the Strait of Hormuz since the war began. In response to the disruption, China, the world\u2019s top exporter of sulfuric acid, began restricting shipments abroad, according to S&P<\/a>.<\/p>\n

Sulfuric acid \u201cis an irreplaceable input in the manufacture of renewable energy materials, such as silicon wafers in solar panels; the nickel, cobalt, and rare earths in wind turbine magnets and electric vehicle (EV) motors; and the copper wiring in every grid connection and transformer,\u201d wrote Atlantic Council fellow Alvin Camba in an analysis<\/a> for the think tank. <\/p>\n

\u201cMost elemental sulfur comes from the Middle East,\u201d Camba told me, \u201cand it goes to places like Indonesia,\u201d where metals are processed to \u201cproduce the batteries for a lot of vehicles for companies like Tesla, BYD, and Honda.\u201d<\/p>\n

Shortages of sulfuric acid will likely hit Indonesia especially hard. The country produces about 60% of the world\u2019s nickel, but has only about a month\u2019s inventory of sulfur, according to a team of Morgan Stanley analysts. \u201cWe believe the energy shock is reverberating and will sustain beyond the reopening of the Strait of Hormuz,\u201d the analysts wrote of China\u2019s export restrictions. \u201cIt will keep fuel markets tighter, lift the cost curve for Indonesian nickel, and raise refining margins in Asia. Higher energy prices will show up in food, tech and battery supply chains.\u201d<\/p>\n

Already, according to Morgan Stanley, \u201cseveral\u201d Indonesian nickel producers have reduced their output by at least 10% from last month. In the Democratic Republic of Congo, copper and cobalt miners are reducing their use of chemicals in their operations and considering cutting output.<\/p>\n

Battery manufacturers are already seeing higher costs for their materials. The Chinese battery giant (and Tesla supplier) CATL saw its profit margins decline quarter-over-quarter revenue growth due to \u201ccost pressure,\u201d Morningstar analyst Vincent Sun wrote last week in a note to clients \u2014 and that\u2019s despite greater sales volumes as consumers attempt to escape fossil fuel-dependency. As sulfuric acid rises in price, the battery companies will also be competing with agribusiness, who use sulfuric acid to produce phosphate fertilizers, Camba told me.<\/p>\n

Even Ivanhoe Mines chief executive and metal and mining mega-bull<\/a> Robert Friedland said in a statement<\/a> last week, \u201cIf the closure of the Straits of Hormuz continues \u2026 second-derivative effect will be on global copper production due to the shortage of the world\u2019s most important industrial chemical, sulfuric acid.\u201d Friedland described the market for sulfur and sulfuric acid as \u201cextremely tight.\u201d<\/p>\n

That also spells bad news for lithium, the namesake mineral used in EV batteries. Around half of global lithium production comes from spodumene, a hard rock mined largely in Western Australia<\/a>. Refining that rock requires a “shitload” of sulfuric acid, Nathaniel Horadam, the founder and president of Full Tilt Strategies, told me, through an energy intensive process known as \u201cacid baking<\/a>.\u201d<\/p>\n

Australian mines were already suffering from high diesel prices and shortages due to the conflict in Iran, according to Argus Media. The high price of sulfuric acid could put a squeeze on margins for lithium refining, which largely occurs in China.<\/p>\n

\u201cIf their production costs go up, that\u2019s going to be factoring into their market pricing,\u201d Horadam said. \u201cI would expect all those prices to go up in the short to medium term until this stuff kind of settles.\u201d <\/p>\n

The other major threat to battery makers specifically, Horadam said, was shortages of petrochemicals like ethylene, which is used in the production of plastics, and polyethylene, a polymer often used in plastic bags.<\/p>\n

Ethylene is often made from ethane, a natural gas liquid, or naphtha, a refined petroleum product and production in the Persian Gulf<\/a> has been severely disrupted by the Hormuz crisis. As of March, Asian petrochemical producers had already reduced<\/a> their output in anticipation of shortages.<\/p>\n

Polyethylene is also a crucial component in lithium-ion batteries, where it\u2019s often used in the \u201cseparator,\u201d which physically divides the cathode from the anode. Even the Trump administration has thrown its support behind polyethylene in battery manufacturing A $1.3 billion loan<\/a> from the Department of Energy\u2019s in-house bank to finance a separator manufacturing facility in Indiana survived the Trump administration\u2019s gutting of that office<\/a>, with $77 million<\/a> getting disbursed last September. (Notably, the Trump-era announcement dropped a reference to electric vehicles and instead enumerated separators\u2019 uses in \u201cdata centers, energy storage, and consumer electronics.\u201d) <\/p>\n

Over 40% of lithium-ion separators are produced in China with the \u201cbulk\u201d of them produced in Asia, according to the DOE, which makes support for domestic production paramount to maintaining international competitiveness and domestic supply chains.<\/p>\n

\u201cWe\u2019re relying on the Chinese and Japanese to produce all our separators and electrolytes and such,\u201d Horadam said. \u201cThis sulfuric stuff is getting all the attention because it\u2019s pretty obvious in terms of visible, salient minerals that are directly impacted, but I wouldn\u2019t sleep on separators and binding agents.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The energy impacts of the continued crisis in the Persian Gulf are obvious. Countries that rely on the…\n","protected":false},"author":2,"featured_media":77224,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[28128,262,28125,15864,19947,102,196,28126,28127,28124,39,19948,101,28123,18809],"class_list":{"0":"post-77223","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-strait-of-hormuz","8":"tag-catl","9":"tag-china","10":"tag-cobalt","11":"tag-copper","12":"tag-ethylene","13":"tag-hormuz","14":"tag-iran-war","15":"tag-lithium","16":"tag-lithium-ion-batteries","17":"tag-nickel","18":"tag-persian-gulf","19":"tag-polyethylene","20":"tag-strait-of-hormuz","21":"tag-sulfuric-acid","22":"tag-tesla"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116445460724822664","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/77223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=77223"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/77223\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/77224"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=77223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=77223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=77223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}