Sulfur prices are rewriting the cost baseline of the phosphorus chemical industry. By the end of April 2026, granular sulfur at Zhanjiang port hit 6,700 yuan/ton, up 8% month-on-month and over 80% year-to-date. Sulfuric acid prices followed suit, sustained by rigid sulfur cost support. This raw material surge is not a short-term fluctuation—geopolitical conflicts, supply tightening, and new energy demand are forcing the industry to rethink its cost structure and supply security.
Cost Transmission Gaps and Pressure High raw material costs have fully penetrated the phosphate fertilizer chain. Chuanheng Co., in its public response, acknowledged that while it has pyrite-based acid capacity and purchases smelter by-product acid, its dominant sulfur-burning process directly raises production costs. Xingfa Group also noted that since March 2026, bulk raw materials like sulfur and methanol have risen sharply, pressuring some business segments.
The key issue is the cost transmission gap. The phosphate fertilizer industry is constrained by price stabilization policies, limiting final product price hikes. Companies face a "produce and lose" dilemma. Simply passing costs to customers is no longer viable; structural solutions at the production end are essential.
Differentiated Strategies of Leading Firms Facing the same cost shock, top companies show divergent responses, centered on raw material self-sufficiency and vertical integration.
Xinyangfeng adopted a "dual-track supply" model: 1 million tons of pyrite-based acid capacity fully avoids sulfur price fluctuations, while 3 million tons of sulfur-burning capacity secures low-cost sulfur quotas via fertilizer supply guarantees. This structure stabilizes procurement costs amid raw material volatility. The company also raises the share of new-type fertilizers, which are less price-sensitive to raw materials.
Yuntianhua focuses on inventory management and procurement optimization. Its ample sulfur strategic stock provides a clear price advantage over market purchases. It also increases smelter acid procurement from Yunnan, diversifying supply to share high-cost pressure and maintain full production.
Xingfa leverages its integrated chain to push price hikes in glyphosate and silicones, smoothing cost transmission. More notably, it is accelerating a phosphogypsum calcination project to produce sulfuric acid and cement, expected to start in 2027, consuming 2 million tons of phosphogypsum and producing 800,000 tons of sulfuric acid annually, directly offsetting sulfur price impacts.
Multiple Acid-Making Technologies: From Option to Necessity High sulfur import dependence is the root of this cost crisis. At the 2026 first-half sulfur chain market conference, the China Phosphate and Compound Fertilizer Industry Association urged accelerating phosphogypsum-based acid technology and improving sulfur strategic reserves to cut import dependence below 30%.
Current high sulfur prices have opened an economic window for phosphogypsum-based acid industrialization. Guizhou Phosphate Group's world-largest "1468" project is running stably, consuming 1.4 million tons of phosphogypsum and producing 600,000 tons of sulfuric acid annually. Chuanheng has postponed a 400,000-ton sulfur-burning project, evaluating phosphogypsum feasibility, while building new pyrite-based acid plants in Guizhou and Guangxi, expected to start in mid-2027, adding 900,000 tons/year capacity, saving about 500 yuan per ton.
These technology routes mean the industry is shifting from passive price acceptance to building a safe, green sulfur supply system.
Medium- to Long-Term Impact and Industry Restructuring This raw material surge is accelerating technology iteration and supply chain autonomy. In the short term, high sulfur and sulfuric acid prices will persist. But over the medium term, improved strategic reserves, phosphogypsum-based acid adoption, and pyrite-based acid expansion will significantly reduce import dependence.
Going forward, a phosphorus chemical company's competitiveness will depend more on its upstream self-sufficiency than downstream scale. Firms that first complete technology switching and supply chain restructuring will gain stronger risk resilience and pricing power in the next cycle.