Sulfur Price Hits 7,633 CNY/Ton, Up Nearly Sixfold in a Year and a Half; Domestic Refining Giants Halt New Orders Due to Tight Supply

March 30, 2026, Dalian – The floor price for a sulfur sales tender was set at 6,210 CNY/ton, up 600 CNY from the previous tender, breaking the domestic record for tender floor prices since 2008. But no one expected this to be just the beginning. On May 18, 2026, the benchmark sulfur price touched a yearly peak of 7,633.33 CNY/ton, and as of May 29, the benchmark price stood at 7,500 CNY/ton, still hovering at high levels. From the cyclical low in the second half of 2024, sulfur prices have surged nearly 600% in a year and a half.

Supply has become extremely tight. Sinopec said that due to strained supplies, the company has suspended sales to new customers and is only fulfilling long-term contract quotas for existing clients. Hengli Petrochemical (Dalian) said it currently has zero sulfur inventory and has switched entirely to a pre-sale model, with orders booked through late August.

On the global supply side, over 90% of sulfur is produced as a byproduct of oil and natural gas refining, with production highly concentrated in the Middle East and Russia. From January to April 2026, the number of vessel shipments from the Middle East to Chinese ports fell 67% year-on-year, and cargo volumes dropped 75%. Meanwhile, Russia, hit by repeated force majeure incidents at its refineries, has shifted from a net exporter to a net importer and imposed an export ban. In the fourth quarter of 2025 alone, attacks on Russian refineries were estimated to have affected about 1 million tons of sulfur supply. With both key supply sources disrupted — the Middle East and Russia — a hard supply gap has emerged.

China's import data confirms this trend. Customs data shows that in April 2026, China imported only 295,500 tons of sulfur, down 42.77% month-on-month and a sharp 72.39% year-on-year, marking the second-lowest monthly import volume in nearly 20 years. From January to April 2026, cumulative imports totaled 1.8471 million tons, down 48.08% from the same period last year — nearly halved. May import data may hit a new low, and vessel resources for June remain limited.

Port inventories have flashed red. As of May 28, sulfur stockpiles at major Chinese ports stood at just 992,400 tons, down 3.94% week-on-week and more than 50% year-on-year. Major port inventories are now less than one month's domestic consumption.

While supply is severely constrained, demand continues to expand, driven by the new energy sector. In 2025, global sulfur demand from the new energy sector surged 29% year-on-year, from about 8 million tons to over 10 million tons. Two key drivers stand out. First, China's lithium iron phosphate (LFP) capacity expansion has been explosive: from 2025 to February 2026, planned new and expanded LFP projects in China exceeded 4.1 million tons per year, the most intensive expansion cycle since 2020. Second, Indonesia is set to bring on stream about 658,000 tons of MHP (mixed hydroxide precipitate) capacity in 2026, corresponding to a sulfur demand increase of up to 6.58 million tons.

Estimates suggest global sulfur supply-demand gaps of 300,000 tons, 5.13 million tons, and 4.05 million tons in 2025, 2026, and 2027 respectively. 2026 will see the largest gap, with supply-demand tensions reaching a historical peak.

The contrast between upstream and downstream is stark. Upstream refiners are raking in huge profits. Domestic sulfur production capacity is highly concentrated, forming a "triopoly" of Sinopec, PetroChina, and private refiners. Sinopec leads with 8.34 million tons/year, followed by PetroChina with 3.68 million tons/year, and Rongsheng Petrochemical tops private players with 1.21 million tons/year. As a byproduct of refining, sulfur only bears direct processing costs, with full costs as low as 200–500 CNY/ton. At current market prices, sulfur gross margins exceed 90%.

Downstream, the price surge has caused severe pressure. Leading phosphate fertilizer producers say costs per ton of phosphate fertilizer have risen around 1,000 CNY, leaving thin profits or even losses. The titanium dioxide industry, also reliant on sulfur-based sulfuric acid, sees its profit margins squeezed by higher costs. Some small and medium-sized chemical firms, facing raw material shortages and high costs, have been forced into maintenance or production cuts.

Downstream sectors have launched self-help measures. In December 2025, the China Sulfuric Acid Industry Association and the China Phosphate & Compound Fertilizer Industry Association held a joint meeting, calling for strict controls on sulfuric acid exports, prioritizing domestic phosphate fertilizer production, stabilizing sales prices at specified levels, and encouraging long-term supply agreements between upstream and downstream. The export suspension order issued by China's General Administration of Customs is a continuation of these self-help efforts.

Given that nearly half of global sulfur exports pass through the Strait of Hormuz, and that constraints on crude oil supply are expected to reduce utilization rates at East Asian refineries, the sulfur supply-demand imbalance is unlikely to ease in the medium term. Sulfur is an internationally priced commodity based on global supply and demand. With tight global supply and rising overseas contract prices, domestic sulfur prices are expected to climb further.