In the first four months of 2026, sulfur prices surged over 80% year-to-date, reaching a record 6,700 yuan/ton at Zhanjiang Port by late April, with a monthly increase of 8%. Sulfuric acid prices followed suit, exacerbated by concentrated maintenance shutdowns of smelting acid plants. This raw material spike is now testing cost management and supply chain resilience across the phosphorus chemical industry.
Industry-wide cost transmission challenges
The impact of raw material inflation is unevenly distributed. Chuanheng Co. disclosed that its mainstream sulfur-burning acid process is directly exposed to sulfur price volatility, despite having some pyrite-based capacity and purchasing smelter by-product acid. Xingfa Group noted that since March, rising sulfur and methanol prices have pressured some business segments, though price hikes for glyphosate and silicones have helped pass on costs.
Industry data shows sulfur prices are at historic highs. Analysts predict that ongoing geopolitical tensions in the Middle East and rising demand from emerging sectors like nickel hydrometallurgy will keep sulfur prices elevated in the medium to long term. This suggests a structural cost shift rather than a temporary spike.
Divergent strategies of leading firms
Leading firms are not waiting passively. Instead, they are building defense systems from multiple angles: raw material self-sufficiency, procurement channels, product mix, and inventory strategy.
Xinyangfeng has adopted a dual-track supply strategy: its 1 million-ton pyrite-based acid capacity fully avoids sulfur price fluctuations, while its 3 million-ton sulfur-burning capacity leverages fertilizer supply guarantees to secure low-cost sulfur quotas. The company is also increasing the share of new-type fertilizers, which are less sensitive to raw material costs.
Yuntianhua relies on ample strategic sulfur inventories, which provide a clear cost advantage over market purchases. It is also optimizing international procurement and increasing purchases of smelter acid from Yunnan to diversify supply.
Xingfa leverages its integrated industrial chain to pass on costs through price hikes for glyphosate and silicones. More notably, it is accelerating a phosphogypsum calcination project to produce sulfuric acid and cement, expected to start in 2027, with annual capacity of 800,000 tons of sulfuric acid, directly offsetting sulfur price shocks.
Chuanfa Longmang uses scale and technology for lean cost management, combining bulk procurement with flexible production. Yuntukonggu improves self-sufficiency in its phosphorus-nitrogen integrated chain, switches flexibly between pyrite and sulfur-based acid production, and expands into high-value thermal phosphoric acid.
Diversified acid production as key to industry resilience
China's high dependence on imported sulfur makes it vulnerable to international disruptions. At the 2026 first-half sulfur supply chain conference, the China Phosphate and Compound Fertilizer Industry Association called for accelerating phosphogypsum-to-acid technology and building strategic sulfur reserves, aiming to cut import dependence below 30%.
The current high sulfur price has opened an economic window for phosphogypsum-to-acid projects. Guizhou Phosphorus Group's world-largest project, with annual capacity to consume 1.4 million tons of phosphogypsum and produce 600,000 tons of sulfuric acid, is running stably.
Chuanheng has postponed a 400,000-ton sulfur-burning project and is evaluating phosphogypsum technology. New pyrite-based plants in Guizhou and Guangxi, expected by mid-2027, will add 900,000 tons/year capacity, covering nearly 40% of its acid needs and saving about 500 yuan per ton.