The trajectory of sulfur prices in spring 2026 can no longer be described simply as a 'rise.' By the end of April, granular sulfur at Zhanjiang Port hit 6,700 yuan per ton, up 8% month-on-month and over 80% year-to-date. For the phosphorus chemical industry, this directly elevates production costs for phosphate fertilizers, while downstream price stabilization policies limit the pass-through, trapping the sector in a 'production equals pressure' dilemma.
Behind the surge are intensified global geopolitical conflicts tightening supply, coupled with rising demand from new energy sectors like nickel hydrometallurgy, collectively pushing up sulfur pricing. Sulfuric acid prices followed, supported by rigid sulfur costs and concentrated maintenance of smelter acid units in May-June. Public data shows China's high dependence on imported sulfur means external supply shocks directly trigger cost earthquakes in the domestic chain.
Divergence Under Cost Pressure
Facing raw material spikes, phosphorus chemical firms show clear divergence in coping ability. Chuanheng Co. admitted its mainstream sulfur-burning process, despite some pyrite-based capacity, still suffers significant cost drag from sulfur price hikes. Xingfa Group noted that since March 2026, sulfur and methanol price increases have pressured some segments, but its integrated industrial chain allowed glyphosate, silicones, and yellow phosphorus to follow price trends, smoothing cost transmission.
This divergence stems from differences in raw material self-sufficiency, product mix, and inventory management. Xinyangfeng built a dual-track supply of pyrite-based and sulfur-based acid production: its 1 million ton pyrite capacity fully avoids sulfur price volatility, while its 3 million ton sulfur-based capacity leverages fertilizer supply guarantees for stable low-price sulfur quotas. Yuntianhua relies on ample strategic sulfur inventories for cost advantages, optimizing international procurement and increasing smelter acid purchases from Yunnan.
Tech Breakthrough: Economic Window for Phosphogypsum-to-Acid
The high sulfur price unexpectedly opens an economic window for phosphogypsum-to-sulfuric acid technology. Historically too costly for large-scale adoption, the current sulfur price makes this route economically viable. The China Phosphate and Compound Fertilizer Industry Association proposed accelerating this technology and building strategic sulfur reserves to cut import dependence below 30%.
Guizhou Phosphate Group's '1468' project, the world's largest phosphogypsum decomposition unit, consumes 1.4 million tons of gypsum annually, producing 600,000 tons of sulfuric acid. Xingfa Group accelerates a similar project, expected online by 2027, consuming 2 million tons of gypsum and producing 800,000 tons of sulfuric acid yearly. Chuanheng Co. postponed a 400,000-ton sulfur-based acid project, pivoting to evaluate phosphogypsum technology and building new pyrite-based units in Guizhou and Guangxi, with 2027 mid-year startup, saving roughly 500 yuan per ton.
Long-Term Logic of Chain Resilience
This raw material price spike, superficially a cost crisis, is deeply a catalyst for tech iteration and supply chain autonomy. The high sulfur price environment is unlikely to change soon, but firms are building more resilient cost systems through diversified acid routes, strategic reserves, and product upgrades.
For buyers, focus on suppliers with pyrite or phosphogypsum capacity, whose costs are less impacted by sulfur price swings. For exporters, track the commissioning timeline of phosphogypsum projects; after 2027, China's increased sulfur self-sufficiency could reshape the cost structure of export products.