These resources that are vital to us are also stuck in the Strait of Hormuz.

Ask AI · What strategies can China use to respond to the Hormuz bottleneck dilemma of resource chokepoints?

“This throat waterway carries more than just oil and gas. There are several strategic resources like azurite, which are usually niche and easy to overlook, but at critical moments can choke the lifeline of modern industry.”

** Author / Ba Jiu Ling**

We’ve all heard Jay Chou sing, “The sky-blue waits for the rain, and I’m waiting for you,” but most people probably don’t know that in nature there really is a mineral called “azurite.” Right now, it is stuck in the Strait of Hormuz, leaving global manufacturing and, in particular, China’s manufacturing industry, waiting anxiously.

How important is azurite? It is a key raw material for producing strontium carbonate, and strontium carbonate is an indispensable material for core components like permanent magnet motors in new energy vehicles. More tricky still is that Iran is the world’s largest producer of azurite, with output accounting for 32%–39% of the global total.

Azurite

Once the Strait of Hormuz is shut, high-grade ore can’t get out, disrupting the production rhythm of global—especially China’s—new energy vehicle industry. Similar situations, like the butterfly effect, are still spreading.

In fact, this throat waterway carries not only oil and natural gas, but also many other strategic resources like azurite—niche and easy to overlook in ordinary times, yet able to choke the lifeline of modern industry at critical moments.

** Niche “industrial vitamins”**

The strontium element extracted from azurite is similar to rare earths. Its usage volume isn’t that large, but it is indispensable.

In addition to magnetic materials, it is widely used in areas such as metal smelting, fireworks and flares, and electronic ceramics. The corresponding products range from aircraft and ships down to mobile phones, precision machine tools, cameras, and even banknote counters……

China’s azurite reserves are actually quite substantial, accounting for 25% of the world and ranking first globally, but because the ore grade is generally low—about 35%–60%—domestic production in recent years has fallen from the former 50% of the global total to around 15%.

By comparison, Iran’s azurite reserves are not as high as ours, but 85% of its ore is of very high grade, and its output accounts for 56% of the global total.

This creates an awkward situation: 60% of the azurite we import every year comes from Iran.

As the saying goes, pulling one thread affects the whole tapestry. After the Strait of Hormuz blockade, the average market price of strontium carbonate rose 152% from the start of the year. If the situation of persistent tight azurite supply does not ease, it will inevitably push up the manufacturing costs of end products such as new energy vehicles and various other electrical and mechanical products.

March 2026, strontium carbonate prices have surged

At present, China’s response strategy is to shift toward domestic low-grade ore sources such as those in Qinghai and Chongqing. Costs may increase by several percentage points, but at least basic supply is secured.

Another scarce “must-have” is helium (He).

Helium is the second element on the periodic table after hydrogen. It is abundant in the universe, but on Earth it exists almost only in the form of helium gas, and it is extremely prone to escaping into the atmosphere. It is a non-renewable resource.

The helium that ordinary people come into contact with is roughly the helium balloons that can float at amusement parks. But in reality, it is an irreplaceable cryogenic refrigerant and an inert protective gas used in electronic chips, fiber-optic communications, nuclear magnetic resonance, and even in rocket fuel fueling—earning it the nickname “gaseous rare earth.”

Helium is difficult to store, difficult to extract, and has even higher purification thresholds. Globally, the United States provides about 43% of supply. The Middle East comes next, supplying about 34% of the global total, almost all from Qatar. Russia accounts for 9%.

As an industrial powerhouse, China is also a major consumer of helium, with demand accounting for more than 10% of the global total, but China’s own helium reserves are only about 2% of the world total. Industrial helium depends almost entirely on imports, with the Middle East accounting for more than half of import sources.

South Korea, a semiconductor powerhouse, is similarly on average more than 60% dependent on Qatar’s helium. By comparison, Japan is between 28% and 33%, relying more on imported helium from the United States, so the impact it faces is limited.

Right now, a large amount of helium supply is also being blocked at the Strait of Hormuz. China Chemical Industry Daily described this predicament this way: “The Hormuz crisis has impacted helium supply, causing a silent ‘suffocation.’ Once supply is disrupted, high-end manufacturing, semiconductors, aerospace, and medical fields will face shutdown.”

Although in the short term we can still rely on stockpiles and imported Russian helium to absorb the shock, the surge in procurement costs and landed prices is already set in stone. Since the war began on February 28, the price of bundled helium imports has risen from about RMB 80 per cubic meter to RMB 155 per cubic meter, an increase of more than 90%.

What is worth watching is that if fighting in the Middle East escalates, bromine could be the next niche resource to be choked.

Bromine also penetrates every corner of modern industry such as semiconductors and pharmaceuticals. The corresponding products include hundreds of derivatives such as batteries, new energy vehicles, antibiotics, and sedatives. Especially as a high-quality flame-retardant material for electronic components, there is currently no mature replacement solution. Likewise, China is the world’s largest consumer of bromine.

The Dead Sea right next to the Middle East is one of the places in the world with the highest bromine element concentrations. In 2021, the combined bromine mine output of Israel, Jordan, and China accounted for 94% of the world’s total bromine mine production: Israel 46%, Jordan 28%, and China 19%.

Dead Sea salt lake water contains bromine elements

Although China is the third-largest bromine producer, due to extremely strong industrial demand, limited domestic resources and low quality, environmental protection constraints, and other factors, it still relies heavily on imports. After 2024, China’s reliance on bromine imports has exceeded 60%.

Import dependence in the EU and South Korea and Japan is also above 80%. Among them, the bromine used to produce chips in South Korea has 97% coming from Israel. However, Israel’s exports mainly depend on the Red Sea/Suez Canal shipping route and have not been directly affected by the closure of the Strait of Hormuz. But if factors such as the participation of the Houthis cause the Red Sea route to be obstructed, bromine exports from the Dead Sea region may face interruption, and global industry will take another blow.

** Industrial “blood”**

Besides a few “vitamins,” there are also resources themselves that are the “blood” of modern industry. At the same time as they are seriously scarce and hard to replace, they are used in large quantities and have longer supply chains. Broadly speaking, there are two types of links:

One type is key intermediate goods along the chain from oil and gas to basic chemical products—for example, naphtha from oil downstream, and methanol derived from natural gas extensions.

Naphtha can be used to produce polyethylene and polypropylene. Refined products such as epoxy resin and BT resin, which are electronic-material intermediates, are core raw materials for photoresists and encapsulation resins.

In 2025, Middle East exports accounted for more than 60% of global seaborne naphtha trade. In Asia, more than 54% of seaborne naphtha needs to pass through the Strait of Hormuz. A well-known chemical industry institution, ICIS, believes that Asia’s petrochemical “heartland” relies on Middle East naphtha, and there is no short-term alternative.

However, a report from Hua Tai Ruisi Research points out that most coal chemical industry capacity worldwide is concentrated in China. Through coal-to-methanol and coal-to-naphtha production, we at least have some buffer space.

April 7, due to restricted naphtha supply

Korea film packaging material prices rise

As for methanol derived from natural gas, it is widely used across various fields—from furniture and building materials to automotive interior trims. The Middle East accounts for about 15% of global methanol capacity. China is the world’s largest methanol importer, and it is also the biggest buyer of Iranian methanol. In 2025, China imported more than 7.92 million tons of methanol from Iran, accounting for more than 55% of its total imports.

The other type is a chain from oil and gas intermediates to fertilizers to grain—for example, synthetic ammonia used to make urea (nitrogen fertilizer), and also the production of phosphate fertilizer from sulfur. These two major fertilizers directly relate to food security in each country and global food prices.

According to ITA data, in 2025 the Middle East’s share of global synthetic ammonia is about 25%, and urea reaches 35%. India (50%) and Brazil (40%)’s urea demand comes from the Middle East. Globally, about 45% of urea trade routes pass through the Persian Gulf, involving the “throat” passageways of the Strait of Hormuz. By comparison, China mainly uses coal to produce them, so it can still generate independently and even export.

As for sulfur, the Middle East is the world’s largest sulfur export region, with export volume accounting for 55% of total global sulfur trade. Yes, that’s right: China is the world’s largest sulfur consuming country and importer. Its sulfur import dependence is as high as 78%, and 56% of imported sulfur sources come from the Middle East.

After the outbreak of the conflict, sulfur prices have already risen by several multiples. The current alternative plan is to recover sulfur from Russia and Kazakhstan, and rapidly switch capacity using domestic mature sulfur-iron ore acid production technology.

A sulfur production line at a factory in Sichuan

** Warning**

This “blood clot” in the Strait of Hormuz has forced a more sober market to distinguish between two different concepts: resource quantity security and deliverable security.

In the past few years, our thinking about resource supply chain security has usually been that externally we sign long-term contracts and diversify supply sources; internally we rely on strategic stockpiles, the resilience of power systems, substitution through coal chemical industries, and excess capacity to absorb shocks. But after extreme scenarios emerge, the effectiveness of this set of measures is not entirely optimistic. It provides us with some insights:

◎ First, diversification in procurement is not only about countries or regions—it also depends on “route correlation.” Otherwise, even if you look diversified on the surface, it is still difficult to hedge risk.

◎ Second, it is necessary to keep exploring energy routes. Whether it is opening the China-Russia Arctic route or strengthening land corridors, physical breakthroughs are more urgent than merely diversifying supply on paper.

◎ Third, as stated by Zhaochun Gan, vice director of the China Gas Association: “When it comes to the supply chain security of key strategic resources, you cannot do without both market-based inventory and domestically produced substitution. China needs to accelerate the building of a four-in-one security system: ‘increased domestic production + diversified imports + strategic stockpiles + technological recovery.’”

Taking helium as an example, while we expand import sources and optimize supply pipelines from Russia and other countries, we also need to tackle domestic self-reliance and fill in industrial weak spots. In recent years, a series of efforts has increased the self-sufficiency rate of domestically produced helium from less than 5% a few years ago to nearly 15% now. Some in the industry believe we are fully capable of raising our domestically controlled and controllable rate to a safe level of 40%–50%.

Azurite follows a similar logic. If Iran cuts off supplies, it will force domestic strontium mining operations to undergo technological upgrades and revamps, and we will work to reduce the pressure of cost increases caused by declining ore grades. For many companies, this is both a challenge and an opportunity.

We still don’t know when the Strait of Hormuz blockade will be lifted, but it warns us: holding the lifeline of energy in our own hands requires not only making things bigger, but also making them more specialized, more in-depth, and for the long term.

References:

1. “Hua Tai Fixed Income: Next, pay attention to hidden risks in the supply chain; risks of physical breaks in oil and gas supply chains need to be evaluated in advance,” selected broker research reports

2. “The ‘throat’ is strangled—how can it ‘breathe’?—Questions about the gas industry under the Hormuz crisis,” China Chemical Industry Daily

3. “Iran blocks the Strait of Hormuz; stocks, bonds, and gold all fall together; investors suffer in their hearts,” Sina Finance

4. “Special Report | ‘Like throwing a hand grenade’—How the U.S.-Iran conflict and the Israel-Iran conflict roil the world economy,” People’s Daily

5. “Why have bromine prices skyrocketed?” China Industry Economics Information Network

6. “‘Invisible champion’ companies are key to strengthening manufacturing,” China News Weekly

** Author | Yuan Yinyin | Editor | He Mengfei**

** Editor-in-chief | | He Mengfei | Photo source | VCG, network**

Author statement: personal views, for reference only