At present, the international sulfur market is experiencing an unprecedented supply crisis, which is rooted in the long-term closure of the Strait of Hormuz due to the geopolitical conflict in the Middle East. Since the conflict broke out at the end of February, 2026, navigation in the Strait has been basically suspended for nearly two months, and a large amount of sulfur that has been loaded cannot sail out of the Arabian Gulf.
It is estimated that the amount of stranded shipped sulfur is as high as 800-1 million tons, of which more than half are pre-contract orders. At the same time, the main sulfur producing countries in the Middle East were forced to reduce the operating rate due to the exhaustion of storage space, and the natural gas plant in Las Lavan, Qatar was seriously damaged, which would take several years to repair. Although the United Arab Emirates, Kuwait and other countries maintain a small number of shipments, the speed is extremely slow.
Affected by this, the global spot price of sulfur soared sharply. The FOB price in the Middle East jumped from US$ 660-680/ton in mid-April to US$ 735-745/ton at the end of April, while the CIF price range in Brazil has risen to US$ 900-1090/ton, and the CIF price in South Africa even reached US$ 990-1000/ton. In the China market, the CIF price of granular sulfur rose sharply from $ 794-800/ton last week to $ 850-900/ton, and any mainstream source that can arrive in Hong Kong within 40 days is quoted at more than $900/ton.
The high price has begun to bite the demand. The operating rate of fertilizer plants in North Africa has dropped by 30-50%. Huayou Cobalt, an Indonesian nickel and cobalt producer, announced that it will cut its MHP production capacity by half from May 1, and the overall production reduction of battery materials industry is estimated to reach 38%. With the end of the spring fertilizer season in China and the suspension of the export of diammonium phosphate and monoammonium phosphate until the end of the year, domestic phosphate fertilizer enterprises have taken the initiative to reduce the operating rate to 50-55%, and will further decline in the later period.
Faced with the huge gap between the CIF price of imported sulfur and the inventory price of domestic ports, China buyers generally resist high-priced imported goods. Fortunately, recently, two ships carrying Iranian sulfur sailed to China through the Strait of Hormuz, which provided the market with a lower cost option. At the same time, refineries in Japan and South Korea cut production due to the shortage of crude oil raw materials, and the delivery of liquid sulfur was delayed, further tightening the spot supply in East Asia.
Facing the continuous tight supply of sulfur resources, the China government's countermeasures are mainly reflected in two aspects: first, strictly restrict the export of chemical fertilizers, ensure domestic agricultural demand by suspending the export of DAP/MAP and binary compound fertilizer, and reduce the pressure of dependence on imported sulfur; Second, the export of industrial sulfuric acid is prohibited. Domestic sulfuric acid is subject to the shortage of sulfur raw materials, and export is no longer economically feasible. In addition, the National Development and Reform Commission continues to implement the highest retail price and subsidy policy for fertilizers, requiring enterprises to give priority to ensuring the affordable fertilizer price for farmers, which forces phosphate fertilizer enterprises to control production costs, thus curbing the willingness to purchase high-priced sulfur.
Looking forward to the future trend of China sulfur market, the price is expected to remain high and fluctuate in the short term, but the upside is limited. On the one hand, it is difficult to ease the conflict in the Middle East in the short term, it will take weeks or even months for the Strait of Hormuz to resume navigation, and it will take a long process to digest the backlog of cargo and normalize transportation, making it difficult to fill the global supply gap quickly. On the other hand, domestic demand in China is weakening seasonally. After the May Day holiday, domestic fertilizer consumption basically ends. Under the prohibition of export, phosphate fertilizer enterprises will further reduce their burdens and sulfur consumption will be significantly reduced.
At present, the sulfur inventory in the main ports of China has dropped to less than 1.25 million tons. Although the inventory has been removed quickly, it is expected to slow down with the decline in purchasing willingness. If Iranian sulfur can continue to arrive in Hong Kong in increments, it will partially replace mainstream high-priced sources and curb the further increase of domestic import quotations.
Comprehensive judgment shows that the sulfur market in China will enter a high stalemate stage at the end of the second quarter, with a high probability of CIF fluctuating in the range of 800-900 USD/ton, and the possibility of a sharp decline is low, unless the supply in the Middle East suddenly recovers or the global industrial demand shrinks more sharply. In the long run, the structural contradiction of low sulfur self-sufficiency rate in China will be more prominent because of this crisis, and the investment in domestic sulfur resource recovery and sulfur substitution technology is expected to accelerate in the future.
