Sulfuric Acid Costs Explode, Forcing Battery Maker Exide to Hike Prices

Exide Industries Limited, India's largest manufacturer of lead-acid storage batteries, is preparing significant price hikes across its product range as the cost of sulfuric acid has jumped. Company management described the situation as follows: "We are very, very badly hit" by the surge, citing severe pressure on operating margins.

Founded in 1947 and headquartered in Kolkata, Exide Industries operates ten manufacturing facilities across five Indian states (Maharashtra, West Bengal, Uttarakhand, Tamil Nadu, Haryana, and Gujarat), plus additional plants in Sri Lanka, the United Kingdom, and Singapore. The company exports to more than 60 countries and supplies batteries to leading automakers including Tata Motors, Maruti Suzuki, and Bajaj. Beyond its dominant lead-acid business, Exide is investing heavily in lithium-ion cell manufacturing through its subsidiary Exide Energy Solutions Limited, which is building a multi-gigawatt greenfield plant in Bengaluru.

The immediate trigger for the cost shock is the de facto closure of the Strait of Hormuz on February 28, 2026, following military escalation in the Persian Gulf. The Middle East accounts for roughly 24 percent of global sulfur production and around 50 percent of seaborne sulfur trade, virtually all of which transits through the strait. Sulfur is the primary feedstock for sulfuric acid, and global elemental sulfur prices have risen more than 70 percent since the conflict began, with some benchmarks up over 100 percent versus the start of 2026.

In mid-April 2026, the Chinese authorities notified domestic producers of a comprehensive ban on industrial sulfuric acid exports effective May 1 through December 31, 2026. China shipped about 4.6 million tons of sulfuric acid in 2025, accounting for roughly 15 percent of global exports, and the export halt has redirected supply pressure onto buyers across South and Southeast Asia. India is particularly exposed: domestic sulfur stockpiles reportedly dropped below two weeks of consumption in early 2026, leaving battery, fertilizer, and chemical manufacturers scrambling for alternative sources.

Exide management has signaled a flexible, stage-wise approach to price increases. The company implemented a price hike in January 2026 and is now planning additional rounds calibrated to macroeconomic conditions.

The export business is under strain. Exide's batteries shipped to North America, Europe, the Gulf Cooperation Council, and other regions face thinner margins as feedstock costs climb faster than the company can pass through prices in competitive international markets.

Exide's structural advantage of large-scale domestic lead recycling provides partial insulation against lead price shocks, but recycling cannot offset the sulfuric acid input, which is consumed during electrolyte production and cannot be recovered from spent batteries in the same closed loop. The company is exploring alternative sourcing arrangements, prioritizing long-term contracts with non-Middle Eastern suppliers, and accelerating internal cost optimization initiatives.

Beyond Exide, the broader Indian battery and chemical sector faces similar pressures. Competitors such as Amara Raja Energy and Mobility are also navigating the same input cost environment, while phosphate fertilizer producers and copper smelters compete for dwindling sulfuric acid availability. Indian fertilizer costs are projected to rise 15 to 20 percent in the first half of 2026, threatening farm input affordability ahead of the kharif planting season.

For end consumers, Exide's planned price hikes will translate into more expensive automotive replacement batteries, inverter and home UPS (Uninterruptible Power Supply) systems, and industrial backup solutions across India and its export markets. The replacement battery cycle, which historically delivers Exide's strongest margins, may see softer volumes if retail pricing rises sharply, although the essential nature of the product limits demand elasticity in the short term.