Sulfur Price Record High 2026 | Global Supply Shortage & New Energy Demand Push China Sulfur Rally

China’s domestic sulfur market has hit unprecedented record pricing in May 2026, with benchmark sulfur price climbing to 7,633.33 CNY/ton, surging nearly 600% from the low price seen in late 2024. Tightened global sulfur supply from Middle East shipment cuts and Russia’s export ban has triggered a drastic plunge in China’s import volume, while robust new energy consumption including lithium iron phosphate and Indonesian nickel projects creates a record-high supply deficit, squeezing profit margins of downstream fertilizer and chemical manufacturers severely.

1. China Sulfur Price Skyrockets to All-Time High

Starting from March 30, Dalian sulfur tender base price was marked at 6,210 CNY/ton, an increase of 600 CNY versus previous round and breaking the highest tender floor since 2008. The uptrend kept accelerating until mid-May, when domestic benchmark sulfur peaked at 7,633.33 CNY/ton; quotations remained around 7,500 CNY/ton as of May 29 with strong high-price volatility. Calculated on late 2024 bottom price, sulfur has delivered close to 600% price appreciation within 18 months.

Major domestic refiners adopt strict sales limits amid insufficient spot supply. Sinopec stopped accepting new client orders and only fulfills long-term contract clients’ fixed quota; Hengli Petrochemical’s Dalian refinery holds zero sulfur inventory and switches fully to pre-sale mode with pending orders locked through mid-to-late August.

2. Global Supply Crunch: Middle East & Russia Shipments Sharply Curtailed

Over 90% of global sulfur output is refined as crude and gas by-product, heavily concentrated in Middle East and Russia, two core supply regions now trapped in export disruption. From Jan-Apr 2026, sulfur shipping vessels from Middle East to China dropped 67% YoY and total cargo slumped 75%. Meanwhile, Russia turned from net sulfur exporter into net importer after multiple refinery force majeure from regional strikes, followed by official sulfur export ban; Q4 2025 refinery attacks alone wiped out around 1 million tons of Russia’s sulfur supply. Dual interruption of top two global suppliers directly leads to irreversible global supply shortage.

China customs statistics verify import shrinkage: April 2026 sulfur imports only 295,500 tons, down 42.77% MoM and 72.39% YoY, hitting the second-lowest monthly import volume in nearly two decades. Cumulative Jan-Apr imports fell 48.08% year-on-year to 1.8471 million tons, and May & June inbound cargoes are projected to stay extremely low. National port sulfur inventory stood at 992,400 tons on May 28, down over 50% year-on-year and below one month of China’s overall domestic consumption.

3. Exploding New Energy Demand Widens Supply-Demand Gap

New energy sector becomes the dominant demand growth engine for global sulfur. Global new-energy-related sulfur consumption jumped 29% YoY in 2025 from 8 million tons to above 10 million tons, driven by two pivotal downstream sectors:

1. China’s lithium iron phosphate (LFP) capacity expansion: newly built and expanded LFP projects total planned capacity exceeds 4.1 million tons/year from 2025 to Feb 2026, the largest expansion cycle since 2020.

2. Indonesia’s nickel MHP project rollout: around 658,000 tons of new MHP capacity goes online in 2026, consuming an extra 6.58 million tons of sulfur.

Industry forecast puts global sulfur supply-demand deficit at 300,000 tons (2025), 5.13 million tons (2026) and 4.05 million tons (2027), with 2026 marking the tightest supply balance in history.

4. Polarized Profit: Upstream Refiners Boom, Downstream Chemical & Fertilizer Suffer

China’s domestic sulfur production is dominated by Sinopec (8.34Mt/a), PetroChina (3.68Mt/a) and private refiners led by Rongsheng Petrochemical (1.21Mt/a). As refinery by-product, sulfur’s raw production cost only ranges 200–500 CNY/ton, pushing upstream gross profit margin above 90% under current sky-high market quotations.

By contrast, downstream phosphate fertilizer, titanium dioxide and fine chemical manufacturers face drastic cost inflation. Major phosphate fertilizer makers see production cost rising roughly 1,000 CNY per ton with thinning or negative profits; many small-medium chemical factories cut operating rates or suspend production amid raw material shortage. Domestic industrial associations rolled out rescue policies including sulfuric acid export restriction and long-term contract promotion to stabilize domestic downstream supply.

5. Medium-Term Market Outlook

Half of global sulfur seaborne exports pass through the Strait of Hormuz; constrained crude supply will further cut East Asian refinery operating rates and curb sulfur by-product output. Given persistent global supply bottleneck and climbing overseas contractual pricing, China’s sulfur market is expected to retain upward price momentum in the medium run.