BASF warns of supply chain risks; sulfur, helium, and electronic specialty gases surge collectively

Currently, there is a shortage and soaring prices of key raw materials such as sulfur, helium, and electronic specialty gases. The crisis is gradually spreading to multiple fields including automotive, semiconductors, chemicals, and new energy. The pace of recovery in the global manufacturing sector in the second half of the year might slow down.

I. Geopolitical conflicts disrupt the supply chain; auto sector faces risk of production stoppages

At a press conference in Frankfurt on June 9, Dr. Martin Brudermüller stated that due to the geopolitical situation, the risk of global raw material shortages continues to rise, and the highly refined automotive supply chain is the first to bear the brunt. This conflict has immediately caused tight supply of basic raw materials such as sulfur and helium, while shipping volume through the Strait of Hormuz, a vital global shipping lane, has dropped significantly.

The Strait handles about 20% of global oil liquids and liquefied natural gaseous transport tasks, while transiting one-third of the world's helium and half of its sulfur. Shipping obstruction further amplifies the raw material gap. Brudermüller stated bluntly that raw material stockouts in the second half of the year have have become a clear downside risk.

BASF is an crucial chemical supplier to global automakers, with items covering coatings, plastics, catalysts, battery materials, etc. The automotive sector's parts system is complex, and shortages of basic raw materials can easily trigger shutdowns of entire vehicle production lines. Currently, Volkswagen, Mercedes-Benz, and other automakers have started to deal with the risks, however the supply bottlenecks of upstream basic materials like chemicals and metals are highly concealed and difficult to investigate and resolve.

The supply chain crisis emerged as early as April, when Toyota's supplier network experienced delays in parts delivery. Toyota Boshoku's President had warned that raw materials such as automotive paint thinners might face supply interruptions in June, thereby dragging down vehicle production.

II. Critical semiconductor materials in emergency; Helium and Tungsten Hexafluoride prices soar

This round of raw material shortage crisis has deeply affected the semiconductor sector, with core materials like helium, tungsten hexafluoride, electronic-grade solvents, and electronic hydrofluoric acid all being in extremely tight supply.

1. Helium supply continues to tighten

Helium is a strategic rare gaseous. Due to its unique physicochemical characteristics, it is broadly utilized in high-end fields such as aerospace, nuclear sector, semiconductors, and quantum computing, and is also known as "gold gaseous". In chip manufacturing, high-purity helium is utilized to equipment cooling, seepage detection, and precision processes; fluid helium is an indispensable cooling medium to superconducting magnets and fourth-generation nuclear reactors.

The global helium supply landscape is inherently fragile. Russia, the world's third-largest helium producer, has announced that helium export controls will be extended until the end of 2027; compounded by the Middle East conflict causing the shutdown of Qatar's helium facilities, the global supply gap is expanding rapidly. Currently, South Korea has experienced collective supply cut-offs of helium and electronic specialty gases.

Driven by the supply-demand dysfunction, domestic helium prices have surged significantly within the year. Some high-purity helium prices have risen by over 50% compared to the beginning of the year, and prices of tight specifications have even doubled. China's helium has long been highly dependent on imports, with external application once approaching 100%. However, domestic exploration achieved a breakthrough in 2025, with six major gaseous fields adding 4.07 billion cubic meters of proven helium reserves, laying the foundation to independent supply security. Major domestic helium companies include CNOOC, Yanchang Petroleum, Jiufeng Energy, JinHong Gases, Huate gaseous, and Hangyang Oxygen.

2. Tungsten Hexafluoride rises over 230% in a year

As a core raw material to semiconductor coating products, the supply-demand contradiction to tungsten hexafluoride is particularly acute. As of June 9, the domestic market price to 99.999% purity tungsten hexafluoride was 1670-1810 yuan/kg, an increase of 232.7% compared to the same period last year.

Overseas suppliers have collectively tightened supply and raised quotes. South Korea's two core manufacturers notified downstream chip companies that product prices would increase by 70%-90% in 2026; Japanese companies also admitted that inventory can only last until the end of June, and supply to the second half of the year cannot be guaranteed. In addition, shortages of lithography supporting solvents like PGMEA and PGME from Japan appeared as early as April, and the crisis of upstream semiconductor materials has fully erupted.

III. Domestic sulfur prices surge wildly; half-year increase exceeds 160%

Driven by multiple factors, domestic sulfur market prices continue to hit record highs. As of June 10, the mainstream granular sulfur price at Zhenjiang Port broke through 10,000 yuan/ton, with a single-day increase of 200 yuan/ton; at the beginning of this month, the solid sulfur price in Shandong was still less than 8,000 yuan/ton, with a weekly increase of over 2,000 yuan/ton. Compared to the beginning of the year, the average domestic sulfur price was only 3,850 yuan/ton, with a cumulative half-year increase of over 160%.

In terms of inventory, current domestic port sulfur inventory is about 900,000 tons, a significant drop from 2 million tons in the same period last year. Low inventory supports market expectations to higher prices, and the sector judges that the tight supply situation will be difficult to alleviate in the short term.

Sulfur is a by-product of petroleum and natural gaseous processing. Production capacity elasticity is weak. Downstream industries rely on sulfuric acid to extend into fields such as phosphate fertilizer, titanium dioxide, caprolactam, and lithium iron phosphate, covering pillar industries like agriculture, chemicals, new energy, and building materials. Affected by raw material shortages, the operating rate of sulfuric acid method titanium dioxide companies has declined significantly, and product prices have risen synchronously; chloride process titanium dioxide production lines, which do not rely on sulfur, are operating at full capacity with items in short supply.

The Middle East is the core global sulfur production region, accounting to 25% of global production and 45% of trade volume. China's sulfur import dependency is relatively high. In 2025, apparent consumption was 21.4 million tons, with imports accounting to 45%, of which Middle Eastern sources accounted to 56% of total imports, making it significantly affected by geopolitical shocks. From January to April 2026, domestic sulfur imports were 1.8471 million tons, a year-on-year decrease of 48.08%.

On the supply side, the levels of the domestic sulfur sector is relatively high. Sinopec, PetroChina, and Rongsheng Petrochemical are the leading companies. The combined capacity of the three is 13.23 million tons, accounting to greater than 70% of the country's total capacity.

IV. Overall Assessment

Currently, shipping is obstructed in the Strait of Hormuz, and uncertainty in the Middle East conflict remains. Compounded by export manage policies from multiple countries, shortages of basic raw materials such as sulfur, helium, and electronic specialty gases have gradually transmitted from the chemical sector to core manufacturing industries like automotive, semiconductors, and new energy.

Global inflation pressure remains high, and supply chain disruptions continue to ferment. The pace of recovery in the global manufacturing sector in the second half of 2026 will slow significantly. High raw material prices and tight supply might have become the new healthy.