Supply and demand contradictions intensify, sulfur becomes "bull sulfur" with approximately 80% price increase within the year.
Can cost reduction become the core competency of downstream enterprises?

Since the beginning of this year, sulfur has been rising in price, and it has continued to increase even as we enter May. “If you need ten or twenty tons, today we will settle it at 7,800 yuan per ton. And tomorrow it will go up again.” On May 8, a sulfur distributor in Luoyang, Henan told Caixin News that prices are high and supplies are limited, and the company currently has only about 30 to 40 tons in inventory.

According to data from Business Society, from the beginning of 2026 to now, sulfur quotes have risen from about 3,850 yuan/ton to 6,867 yuan/ton, an increase of about 80%. If calculated from the cycle low point in the second half of 2024, sulfur has risen by nearly 600% over roughly a year and a half. “Without a doubt, sulfur is currently in a super bull market,” said an industry observer of sulfur to Caixin News.

However, while some benefit, others suffer. The surge in sulfur prices has significantly raised costs for downstream phosphate fertilizer and titanium dioxide production companies. Downstream companies are facing a sharp increase in cost pressure, and each company is doing everything it can to reduce costs in order to gain a competitive advantage.

Sulfur prices surge, benefiting related listed companies

“Last year, I thought it was impossible for sulfur prices to exceed 3,000 yuan/ton, but now they are already close to 7,000 yuan/ton, and sulfur has turned into ‘bull sulfur.’” A person in charge of a domestic listed phosphate fertilizer company told Caixin News that, in the spot bulk sulfur market right now, some quotes have already reached 1,100 US dollars/ton (about 7,480 yuan/ton).

According to Business Society data, on May 8, the sulfur benchmark price was 6,866.67 yuan/ton, setting a new historical high. Before this round of cycle began, the domestic sulfur historical highest price occurred in July 2008, when the prevailing transaction price was close to 6,000 yuan/ton.

At the end of March this year, solid sulfur was quoted at 5,942 yuan/ton and liquid sulfur at 6,003 yuan/ton, breaking above the 2008 average high point. In mid-April, the sulfur benchmark price rose to 6,533 yuan/ton. In early May, it climbed further to 6,800–6,867 yuan/ton.

As a downstream product of sulfur, sulfuric acid prices have risen in tandem with sulfur. Public information shows that at the beginning of January sulfuric acid was priced at about 917 yuan/ton, and by May 8 it had risen to 1,950–2,100 yuan/ton, doubling compared with the start of the year.

Even with sulfur reaching a historical high, the sales pace was not affected. As the aforementioned industry insider explained, downstream procurement is active. Some downstream companies worry that in the later period, especially for liquid sulfur, supply may be tight, which supports the rise of domestic prices. In addition, port prices also affect domestic market sentiment.

The surge in sulfur prices has significantly improved the profitability of related listed companies’ products. Caixin News’ review found that large-scale refining enterprises with substantial sulfur production include China Petrochemical (600028.SH) with annual capacity of 8.34 million tons, China National Petroleum Corporation (601857.SH) with 3.68 million tons/year, Rongsheng Petrochemical (002493.SZ) with 1.21 million tons/year, and Hengli Petrochemical (600346.SH) with 0.54 million tons/year, among others.

A staff member from Hengli Petrochemical’s securities department said that the company’s current sulfur output is relatively stable, and the price rise has a certain positive effect on performance. At the same time, crude oil prices are also rising, so it is difficult to precisely calculate how much the profit space will improve.

To ensure the supply of raw materials for China’s domestic spring plowing production and key industrial sectors, the General Administration of Customs recently issued an announcement stating that, starting May 1, sulfuric acid exports would be suspended. The specific resumption time is to be determined (tentatively continuing until December 31, 2026), and no alternative measures were provided. Ordinary industrial sulfuric acid and smelting by-product sulfuric acid are prohibited from export. Electron-grade high-purity sulfuric acid may be exported with special approval.

The outlook may still remain strong

As of now, there are no signs that this round of sulfur’s super cycle has ended.

Ma Nuo, a senior analyst at Lonyun Information, told Caixin News that tight sulfur supply and demand is a global issue. Before the conflict in the Middle East broke out, sulfur was already on a unilateral upward trend, and the outbreak of the conflict has intensified this trend.

“Supply-demand mismatch, and the further widening of the scissors gap, are the main factors behind the acceleration of sulfur price increases in recent months,” Ma Nuo said. Sulfur production in the Middle East accounts for 41% of global sulfur production and 50% of trade volume. Disruption at the Strait of Hormuz directly reduces sulfur supply. In addition, sulfur is a by-product of refining; as oil prices rise, sulfur production costs also rise.

“Globally, sulfur supply this year is about 81 million tons, while demand is about 82 million tons. It is expected that demand in the next one or two years may increase to 84–85 million tons, and the supply-demand scissors gap will remain on an expanding trend,” Ma Nuo said. The surge in new energy demand, together with rigid demand from phosphate fertilizers and titanium dioxide, means global sulfur supply is unlikely to see additional growth. It is estimated that throughout 2026 sulfur prices will not fall below 5,000 yuan/ton, and may even fluctuate and linger at high levels. “Even if the Strait of Hormuz reopens, the situation of tight sulfur supply will be hard to ease.”

In terms of domestic demand, from 2025 to February 2026, planned total production capacity for new builds and expansion projects of lithium iron phosphate has already surpassed 4.10 million tons per year, far exceeding the total added capacity in all of 2025. This will become the most intensive expansion cycle since 2020, which will further increase sulfur demand.

Overseas, Zhonglianjin expects that in 2026 Indonesia will see about 65.8 thousand tons of new MHP (nickel-cobalt hydroxide) capacity put into concentrated operation, corresponding to an incremental sulfur demand of 6.58 million tons, which will further aggravate the tight supply situation.

In addition, Ma Nuo believes that the solid battery technology route is expected to gradually converge toward sulfide electrolytes. With lithium sulfide making up as much as 82% of the cost composition, it may open up room for long-term growth in sulfur demand.

On the supply side, in April, due to maintenance at refineries such as Shijiazhuang Petrochemical and Liaohe Petrochemical, and reduced supply from refineries such as Zhejiang Petrochemical, Yulong Petrochemical, and Guangdong Petrochemical, domestic sulfur production was 9.988 million tons, a month-on-month decrease of 8.38%.

China’s dependence on imported sulfur continues to rise. Data from Lonyun Information shows that in 2022 China’s sulfur import dependence was 42%, and by 2025 this figure had increased to about 50%.

Recently, overseas supply has been hard to guarantee. In March 2026, China’s sulfur import volume was 5.163 million tons, down 42.20% year on year. In April 2026, the amount of sulfur resources arriving at ports remained limited, and port inventories were reduced significantly. As of April 30, port sulfur inventories reached 12.519 million tons, down 2.814 million tons month-on-month, a decline of 18.35%.

Ma Nuo believes that going forward, gasoline and diesel demand is about to reach its peak and carbon costs will continue to rise. Global refining capacity faces long-term structural adjustments, so the rate of sulfur supply growth is expected to slow down and eventually peak.

Downstream companies adopt various measures to cut costs

Sulfuric acid is an important raw material used to produce phosphate fertilizer and titanium dioxide. After prices took off, downstream companies are facing enormous cost pressure.

According to industry insiders, for every 100 yuan increase in the price of sulfur, downstream phosphate fertilizer costs increase by about 50 yuan/ton; titanium dioxide costs increase by 30–50 yuan/ton.

Caixin News contacted the securities department of Yuntianhua (600096.SH) as an investor. The staff said the company has multiple sulfur procurement methods and also has a certain amount of low-priced sulfur supply. Previously, when sulfur prices were lower, the company purchased more inventory, which gives it a certain cost advantage over peers. “Some small and medium capacities in the industry have reduced operations due to higher raw material costs, but we are still operating at full capacity.”

In addition, Yuntianhua is also exploring other paths to obtain sulfuric acid. On April 1, the company stated on an investor interaction platform that it is advancing internal pre-argumentation for producing sulfuric acid from phosphogypsum.

A relevant person from Hubei Yihua (000422.SZ) told Caixin News that the low-priced sulfur provided by the “Three Major Oil” companies can meet a portion of the company’s raw material needs, and the company’s operating rate is currently okay for the time being.

A staff member from Huimeng Titanium (300891.SZ), a titanium dioxide producer, said that in order to reduce costs, the company purchases sulfur-iron ore to produce sulfuric acid in-house, which provides a certain cost advantage compared with externally purchasing sulfur.

On May 6, Rongbai Group (002601.SZ), a leading titanium dioxide company, stated on an investor interaction platform that the company uses a combination of purchasing sulfur externally to produce sulfuric acid, directly purchasing sulfuric acid, and concentrating waste acid, in order to ensure sulfuric acid supply.

On May 6, according to the investor activity record published by Chuanheng Co., Ltd. (002895.SZ), in response to the cost pressure brought by the rise in sulfur prices, the company pointed out that sulfur prices may remain at a relatively high level for a long time, putting upward pressure on the costs of phosphate chemical enterprises. The company is working to reduce the cost impact of rising sulfur resource prices by building new sulfur-iron-ore acid production units and actively expanding sulfur procurement channels.

(Source: Caixin News)