Sulfur prices have surged sharply, rising by as much as 600%, and the industry landscape is showing clear divergence

The chemical market has been completely ignited by sulfur. From its low point in the second half of 2024 to now, sulfur prices have surged nearly 600% in just a year and a half, marking the strongest rally since 2008 – a super bull market seen only once a decade. Spot prices have broken through key thresholds one after another. Port supplies have become so tight that sulfur is nearly impossible to find. Upstream refining and petrochemical companies are reaping huge profits, while downstream industries such as phosphate fertilizers and titanium dioxide are mired in a cost crisis. This industry storm, driven by supply-demand imbalances, is reshaping the entire chemical supply chain.

Prices keep skyrocketing, records keep falling

This sulfur price rally began in the second half of 2024, and after entering 2026, it has shifted into an "accelerated sprint" phase, with both the magnitude and frequency of price increases breaking historical records.

On March 30, the floor price for Dalian's sulfur tender soared to 6,210 yuan/ton, a single increase of 600 yuan, hitting a new high for domestic tender prices since 2008. From June 1 to 3, offers for granular sulfur at Zhenjiang Port and Dafeng Port jumped from 7,450–7,500 yuan/ton to 8,400–8,500 yuan/ton – a surge of 950–1,000 yuan/ton in just two days, or about 13%. On June 3 alone, prices rose by 700–750 yuan/ton, an extremely rare occurrence. On June 7, the floor price for solid sulfur from Shandong local refineries further increased to 9,800 yuan/ton, with market expectations that actual transaction prices would exceed 10,000 yuan/ton – up more than 2,000 yuan/ton from early June, compared to a price of just 3,850 yuan/ton at the start of 2026.

Looking at a longer horizon, the magnitude of the increase is even more astonishing. The average domestic sulfur price in 2025 was 2,474.66 yuan/ton, up 126.65% from 1,091.82 yuan/ton in 2024. In East China, solid sulfur prices rose 160% year-on-year. Calculated from the low point in the second half of 2024, prices have climbed nearly 600% in a year and a half – decisively breaking out of normal cyclical fluctuations and entering a structural bull market.

Supply-demand imbalance ignites the rally, geopolitical conflicts add fuel to the fire

The core driver of this sulfur super-bull is a deep mismatch between persistently tightening supply and rigidly growing demand, compounded by supply chain disruptions from Middle East geopolitical conflicts, which have further strained an already tight market.

Domestic sulfur supply is highly dependent on imports and refinery by-products – and both channels have hit bottlenecks.

• Imports blocked: The Middle East is the world's main sulfur-producing region (accounting for 41% of global production and 50% of global trade). Disrupted navigation through the Strait of Hormuz has led to a sharp drop in arrivals. From January to April 2026, the number of sulfur vessel arrivals from the Middle East and cargo volumes fell by 67% and 75%, respectively.

• Domestic production insufficient: As a refinery by-product, sulfur production capacity is limited in its ability to expand, and domestic capacity is highly concentrated (Sinopec: 8.34 million tons; PetroChina: 3.68 million tons; Rongsheng Petrochemical: 1.21 million tons), making a large short-term increase difficult.

• Inventories continue to fall: Current sulfur inventory at domestic ports stands at about 900,000 tons, a sharp drop from 2 million tons a year earlier and at multi-year lows. Tight spot supply is hard to alleviate.

Robust traditional demand combined with a boom in new energy has kept sulfur demand persistently strong.

• Traditional sectors such as phosphate fertilizers and titanium dioxide have stable demand, further boosted by spring farming preparations.

• The new energy industry has become a key incremental driver. In 2026, projects such as domestic lithium iron phosphate production and nickel hydrometallurgical smelting in Indonesia have been launched intensively, significantly increasing sulfur consumption.

• Brokerage data show that domestic sulfur supply-demand gaps for 2025, 2026, and 2027 are expected to reach 300,000 tons, 5.13 million tons, and 4.05 million tons, respectively. The widening gap supports high price levels.

The sharp rise in sulfur prices has quickly transmitted through the entire industrial chain, creating a polarized structure: upstream players enjoy easy profits while downstream players face severe pressure, with stark contrasts between profit and loss.

Upstream refiners see gross margins above 90% and explosive net profits.
Domestic sulfur production capacity is concentrated in Sinopec, PetroChina, Rongsheng Petrochemical, and others. As a refinery by-product, sulfur's comprehensive cost is only 200–500 yuan/ton. At current prices, gross margins exceed 90%, leaving enormous room for profit.

• Sinopec: Its sulfur business generated over 20 billion yuan in net profit in 2025. Based on an average price of 6,000 yuan/ton in Q1 2026, net profit for the quarter alone could reach 8–10 billion yuan, accounting for about 50% of its net profit attributable to shareholders in that period.

• Private refiners: Rongsheng Petrochemical, Hengli Petrochemical, and others are also benefiting. Hengli Petrochemical has stated that with stable sulfur output, the price increase is significantly boosting overall performance.

Downstream industries face surging costs, with profits squeezed into losses.
The main downstream use of sulfur is in sulfuric acid (over 90%), which then feeds into phosphate fertilizers, titanium dioxide, and other sectors. Cost pressures continue to mount.

• Phosphate fertilizer industry: Producing 1 ton of sulfuric acid requires 0.33 tons of sulfur. For every 100 yuan/ton increase in sulfur prices, phosphate fertilizer costs rise by 45 yuan/ton. Currently, the cost per ton of phosphate fertilizer is about 1,500 yuan higher than in the second half of 2024, and some companies have fallen into losses.

• Titanium dioxide industry: Sulfate-process titanium dioxide producers are hit by both raw material shortages and rising costs, leading to significantly lower operating rates. Chloride-process producers, which use almost no sulfur, are running smoothly and seeing strong demand for their products.

Faced with persistently high sulfur prices, downstream industries have begun a diversified set of self-rescue measures. Combined with strong policy support for supply assurance, the market pattern is gradually adjusting. However, the tight supply-demand situation is unlikely to change in the short term, and high prices will persist.

In December 2025, the China Sulfuric Acid Industry Association jointly held a special meeting with the China Phosphate & Compound Fertilizer Industry Association to strictly control sulfuric acid exports, prioritize domestic phosphate fertilizer production, and advocate long-term supply agreements between upstream and downstream players. Yuntianhua is running at full capacity relying on low-cost inventory and diversified procurement. Hubei Yihua is maintaining stable production using fairly priced sulfur. Huiyun Titanium is purchasing pyrite to produce its own sulfuric acid. LB Group has secured raw material supply through multiple channels.

To ensure supplies for spring farming and key industrial raw materials, the General Administration of Customs has issued new regulations. From May 1, 2026, exports of ordinary industrial sulfuric acid and smelting by-product sulfuric acid are suspended, a policy tentatively set to remain in effect until December 31, 2026. Only electronic-grade high-purity sulfuric acid is permitted for export under special approval, with the goal of ensuring domestic supply.

Institutional outlook: High prices to continue, possibly breaking new records

The supply tightness is unlikely to improve before the first quarter of 2026. Only after new supply is released in the second half of the year are prices expected to gradually ease. In the context of the global energy transition, sulfur is transforming from an oil and gas by-product into an independent strategic mineral. Combined with new energy and traditional chemicals competing for sulfur resources, the supply-demand imbalance is unlikely to be resolved in the medium term. The price center of gravity is expected to continue shifting upward, with the possibility of breaking historical highs once again.

This once-in-a-decade sulfur super-bull is not only the result of supply-demand imbalances but also a reflection of sulfur's value reassessment amid the global energy transition. Upstream companies are enjoying windfall profits, while downstream industries are under severe pressure. The industry structure is undergoing a deep reshuffle. For the market, this price surge storm is not over yet. Future developments will depend on the situation in the Middle East, import arrival volumes, and the pace of demand growth from the new energy industry.