6,700 RMB per ton—that was the spot price for granular sulfur at Zhanjiang Port at the end of April 2026, up 8% month-on-month and over 80% year-to-date. Sulfuric acid prices followed closely, with maintenance shutdowns at smelter acid units tightening short-term supply. This raw material surge is forcing the entire phosphorus chemical industry to fundamentally rethink its cost structure.
Cracks in Cost Pass-Through
The phosphate fertilizer chain is sulfur’s largest downstream consumer, with acid-making costs typically accounting for 30%-40% of total production costs. When sulfur prices doubled from around 3,700 RMB/ton at the start of the year to 6,700 RMB, corporate gross margins were rapidly compressed. Sichuan Hengtong publicly stated that despite having pyrite-based acid capacity and purchasing smelter byproduct sulfuric acid, the soaring sulfur price still severely dragged down production costs.
Xingfa Group fared somewhat better. Leveraging a fully integrated chain spanning glyphosate, silicones, and yellow phosphorus, its main product prices rose in tandem, allowing cost pass-through to proceed smoothly. But this “price rise offsets price rise” model is not replicable for most small and mid-sized players, who lack pricing power across multiple product lines.
Xinyangfeng adopted a more structural approach. The company built a dual-track supply pattern of “pyrite-based acid + sulfur-based acid”: its 1-million-ton pyrite acid capacity completely avoids sulfur price volatility, while its 3-million-ton sulfur acid capacity leverages fertilizer supply guarantee permits to secure low-cost sulfur quotas. Meanwhile, Xinyangfeng has been raising the share of new-type fertilizers, which are less sensitive to raw material prices. Once sulfur prices retreat, its margin recovery potential is enormous.
Diversified Acid-Making: From Option to Necessity
China’s sulfur import dependency has long exceeded 50%, making prices highly vulnerable to Middle East geopolitics and shipping disruptions. At the first-half 2026 sulfur industry chain exchange meeting, the China Phosphate and Compound Fertilizer Industry Association explicitly called for accelerating the promotion of phosphogypsum-to-acid technology, aiming to cut sulfur import dependency to below 30%.
Guizhou Phosphate Group’s “1468” project—the world’s largest phosphogypsum decomposition acid-making and cement co-production demonstration—consumes 1.4 million tons of phosphogypsum annually, producing 600,000 tons of sulfuric acid and 800,000 tons of cementitious materials. Xingfa Group is also accelerating its phosphogypsum calcination-to-acid and cement co-production project, expected to start in 2027, with annual capacity to consume 2 million tons of phosphogypsum and produce 800,000 tons of sulfuric acid.
Sichuan Hengtong has postponed its 400,000-ton sulfur-based acid project until prices become reasonable, while accelerating feasibility studies for phosphogypsum-based acid. New pyrite acid units in Guizhou and Guangxi are expected to start in mid-2027, forming 900,000 tons/year capacity covering nearly 40% of its acid needs, with cost savings of about 500 RMB per ton.
Inventory and Procurement: Short-Term Moat, Long-Term Layout
Yuntianhua’s strategy focuses more on inventory management and procurement optimization. With ample strategic sulfur stockpiles, it enjoys a clear price advantage over market buyers. The company has also increased procurement of smelter acid from Yunnan’s surrounding areas, diversifying supply channels and running at full capacity to dilute unit costs.
Yuntu Holdings takes an integration angle, improving its phosphorus-nitrogen integrated chain to raise self-sufficiency, while flexibly switching between pyrite-based and sulfur-based acid production. It has also set up thermal phosphoric acid lines to push products toward higher value-added applications.
Industry Verdict: Cost Restructuring Has Just Begun
This sulfur price surge is not a short-term spike. Ongoing geopolitical conflicts, rising demand from emerging industries like nickel hydrometallurgy, and limited global sulfur capacity additions all point to sustained high prices. For phosphorus chemical companies, cost pressure is structural, not cyclical.
The clearest takeaway: sulfur can no longer be treated as a routine procurement item—it must be managed as a strategic resource. Whether through phosphogypsum-to-acid, pyrite-based acid, strategic stockpiles, or multi-channel procurement, the underlying task is the same: redefine what “sulfur security” means.