Barlow’s Research Roundup: Obscure chemical shortage threatens global copper supply
A shortage of sulphuric acid, exacerbated by China's upcoming export ban, threatens 20% of global copper production, particularly affecting leaching operations in Chile and the DRC. Ivanhoe Mines is positioned as a beneficiary due to its acid-producing smelter, while Capstone and Lundin may face cost pressures. Meanwhile, defense stocks declined despite strong backlogs, as investors react to execution issues and a lack of near-term catalysts.
- ▪China will halt sulphuric acid exports starting May 2026 to prioritize domestic fertilizer and battery production, threatening global copper output.
- ▪Sulphuric acid prices have reached $1,000/tonne, impacting leaching operations that account for 20% of global copper supply.
- ▪Ivanhoe Mines' Kamoa-Kakula smelter produces 1,200tpd of acid, potentially generating over $400 million in annual byproduct revenue.
- ▪Defense stocks including Lockheed Martin and Northrop Grumman declined sharply despite growing order backlogs, as markets focus on margin and execution concerns.
- ▪Analysts warn that optimistic 2026 profit growth forecasts of 17%–20% may be unsustainable given weak GDP correlation and concentrated revisions.
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ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountDaily roundup of research and analysis from The Globe and Mail’s market strategist Scott BarlowCopperRBC Capital Markets analyst Sam Crittenden highlighted an ongoing shortage of the sulphuric acid necessary for copper production and how it benefits one domestic stock,“Copper equities came under pressure this past week, declining 5.5 per cent despite a flat underlying commodity price, with sentiment dragged lower by a pullback in gold (down 2.5 per cent), a firming US dollar (up 0.4 per cent), and a sharp oil rally (up 12.6 per cent) as markets digest the spillover effects of the war in Iran.
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