Recently, the domestic sulfur market in China has witnessed a continuous price rally, attracting widespread attention across the industry. As of December 4th, the mainstream domestic transaction price has exceeded the 4,000 yuan per ton mark. Transaction prices at major domestic ports have reached 4,110 yuan per ton, representing a 17% month-on-month increase and a year-to-date surge of over 160%, hitting a new high in the past decade.
The "crazy" rise of the sulfur market this year is mainly influenced by factors such as tightening international supply, growing downstream demand, and boosted market sentiment. Given the current balance of supply and demand dynamics, the market is expected to maintain a high-level consolidation trend in the short term. Industry insiders suggest that while seizing market opportunities, it is crucial to closely monitor potential risks to maintain the stability of the industrial chain and supply chain.
I. Tightening Supply in Overseas Markets Pushes Up Prices
The strong performance of the international sulfur market has been the core driver behind the continuous rise in domestic sulfur prices in recent months.
Due to factors such as geopolitical conflicts, sulfur exports from Russia and Kazakhstan have declined significantly, while downstream demand, represented by hydrometallurgical nickel smelting in Indonesia, has grown rapidly, leading to a sharp increase in sulfur prices. Liao Kangcheng, Secretary-General of the China Sulfuric Acid Industry Association, analyzed that before the Russia-Ukraine conflict, Russia's sulfur export volume was around 2 million tons, which later dropped to 1 million tons. Entering 2025, frequent attacks on its oil refineries have caused a rapid plunge in exports, with the annual export volume expected to be only 200,000 tons.
Kazakhstan's sulfur exports have also started to decline, reaching 4.85 million tons in 2024 and projected to drop to 4.15 million tons in 2025. Since the growth in its exports mainly comes from inventory digestion, with the continuous reduction of inventories, Kazakhstan's sulfur export volume is expected to further fall to 3.45 million tons in 2026.
II. Downstream Demand Provides Rigid Support
The rebound in the capacity utilization rate of the phosphate fertilizer industry has provided strong support for sulfur demand. Monoammonium phosphate and diammonium phosphate producers have maintained relatively high operating rates since the second half of this year. Enterprises that previously underwent maintenance are gradually resuming production, and the demand for winter reserve fertilizers is being gradually released. The operating rate of the phosphate fertilizer industry still has room for growth, which will further drive the rigid demand for raw material sulfur.
As the main downstream product of sulfur, the stability of international phosphorus compound fertilizer prices has also provided strong support for the sulfur price surge. Liao Kangcheng stated that since the beginning of this year, international prices of phosphate and compound fertilizers have continued to rise. Taking China's diammonium phosphate export price as an example, it stood at 737 US dollars per ton (FOB) at the beginning of November, an increase of 120 US dollars compared with the start of the year and 125 US dollars compared with the same period last year.
III. Intensified Market Bullish Sentiment Amplifies Volatility
This year, the participation of traders in the sulfur market has been significantly higher than in previous years, which is another key driver of the market's rapid rise. A survey of multiple traders found that even though sulfur market prices are already in the historical high range, more than 70% of traders remain optimistic about the market outlook in December.
The recovery of sulfur supply from core supplying countries is progressing slowly. International spot resources remain tight, and there is a possibility that overseas prices will hit new highs repeatedly. Domestic importers are facing increasing pressure on arrival costs, and the volume of goods arriving at ports still cannot meet market demand. This expectation has further strengthened the market's sentiment of holding back sales and being bullish, driving spot prices to rise steadily.
Industry experts suggest that amid the current high-price transaction environment, certain uncertain risks have emerged, which need to be carefully managed and avoided. The main risk factors to focus on include the easing of geopolitical tensions, demand falling short of expectations, changes in alternative processes, and traders taking profits and closing positions.
