Indonesian producers of mixed hydroxide precipitate (MHP) have suspended long-term contract quotations following the escalation of tensions in the Strait of Hormuz. The potential disruption of sulfur supply from the Middle East has created uncertainty in the market, prompting producers and traders to reassess pricing. Some traders have even halted offers for deliveries, expecting prices to rise further.

Indonesia relies heavily on sulfur imports from the Middle East to support its high-pressure acid leach (HPAL) operations. Last year, the country imported 3.95 million tons of sulfur from the region, accounting for about 74% of its total sulfur imports. With shipping through the Strait of Hormuz largely stalled, delays in sulfur shipments to Indonesian buyers have already been reported.

Indonesia has become the world’s main MHP supplier after the closure of several Western HPAL projects in 2023. The country currently operates around ten MHP projects with a combined annual capacity of about 440,000 tons of nickel. However, reduced mining quotas and potential sulfur shortages could slow the expected expansion of Indonesia’s MHP production in 2026.